Prediction Markets and Your Compliance Program – Conflicts of Interest and Reputational Risks
Introduction Recent decisions by some companies to prohibit employee participation in prediction markets signal growing concerns about the reputational, conflicts of interest, and confidentiality risks posed by this rapidly expanding marketplace. Every company where employees have access to nonpublic information, client intelligence, licensed information or data, or proprietary analytical expertise should assess whether its compliance framework adequately addresses the risks these platforms present. I f your company has a principles-based Code of Conduct that provides guidance to employees on ownership of and misuse of data, confidentiality, and conflicts, your company may be technically covered, but you should consider whether additional training, guidance, or policies specific to prediction market activity is appropriate. Preventing prohibited or potentially problematic conduct before it occurs is easier than remediating the problem after the fact. Companies should consider providin...