& Securities

Practical Guidance for Strengthening Corporate Governance and Compliance Policies

Once viewed as niche platforms for political forecasting, prediction markets have evolved into sophisticated marketplaces where participants may trade contracts tied to almost any real-world event. For public companies, this development presents risks that existing compliance programs were not designed to address. Employees, officers, directors, and other insiders with access to confidential company information may now have opportunities to monetize that information through event contracts without ever purchasing or selling traditional securities.

This alert examines the legal and compliance risks prediction markets create for public companies, outlines practical steps companies should consider now to update corporate policies to mitigate any compliance risks, and provides example approaches that some companies have already taken to amend their policies to address prediction market participation.

View the entire Governance & Securities Alert.