PRIVILEGED GOVERNMENT INFORMATION FOR PRIVATE FINANCIAL GAIN

For more than a decade, federal law has recognized a basic corruption problem created when public officials can convert privileged government information into private financial gain. Congress enacted the STOCK Act in 2012 specifically to prohibit members and congressional employees from using nonpublic information derived from their official positions for personal benefit. Fourteen years later, lawmakers from both parties are still trying to strengthen that principle. Republican Senator Ashley Moody and Democratic Senator Kirsten Gillibrand introduced legislation in January 2026 that would prohibit members of Congress, their spouses and dependent children from owning or trading individual stocks. In July, the House passed the Stop Insider Trading Act 232–198. Republican Chairman Bryan Steil described its purpose in plain terms: ensuring that no lawmaker can profit from insider information. (GovInfo)

The concern has already moved beyond stocks. Prediction markets allow money to be placed directly on future events, including elections, government actions, policy decisions and words that public officials will say. In April 2026, Gillibrand and Republican Senator Dave McCormick introduced the Prediction Market Act of 2026. Their bill would prohibit members of Congress, the president, the vice president and senior executive branch officials from trading on prediction markets while directing the Commodity Futures Trading Commission to establish insider-trading standards for material nonpublic information. Steil followed in June with legislation prohibiting lawmakers and their immediate families from wagering on government policies, government actions or political outcomes. The Senate Intelligence Committee also approved language prohibiting intelligence personnel with security clearances from using nonpublic information in prediction markets. Washington has identified the same danger across party lines: access to government information can become a financial advantage. (Kirsten Gillibrand)

The danger is already measurable. Federal prosecutors charged an Army soldier in April with using classified information about the timing of a U.S. military operation in Venezuela to make more than $400,000 through Polymarket. Prosecutors charged a Google employee the following month with using confidential corporate information to make approximately $1.2 million through Polymarket. These cases establish the mechanism. A person learns something before the market learns it. A prediction contract assigns monetary value to that information. The informational advantage becomes money before the underlying event becomes public. (Department of Justice)

Presidential information carries the same economic potential because presidential decisions can move markets almost instantaneously. On April 9, 2025, Donald Trump posted on Truth Social, “THIS IS A GREAT TIME TO BUY!!! DJT.” Approximately four hours later, he announced a 90-day pause on most of the tariffs that had sent markets sharply lower. The S&P 500 rose 9.5 percent that day, the Dow rose 7.9 percent and the Nasdaq rose 12.2 percent. Senators subsequently requested a federal investigation into whether anyone with advance knowledge of the tariff decision traded before the announcement. The episode established something larger than the controversy surrounding one post: information about what the president is about to announce can carry enormous financial value before the public receives it. (Senator Schiff)

Trump Media has now built a business around the speed at which that information reaches financial institutions. Truth API launched on August 1, 2026 as a licensed, low-latency feed carrying posts from influential Truth Social accounts. Trump Media tells investors that the product closes a “latency gap” for organizations that place a premium on prompt access to information. By August, the company had signed more than 10 customers, primarily high-frequency trading firms, at rates generally between $60,000 and $100,000 per month. Trump Media also disclosed that it is evaluating data-licensing opportunities involving prediction markets. The product operates at the moment public information enters the market, where milliseconds possess commercial value because automated trading systems can react before ordinary investors have even seen the statement. (SEC)

The ownership structure brings the presidency directly into that revenue stream. Securities and Exchange Commission records identify Donald Trump as the sole beneficiary of a revocable trust holding approximately 41.5 percent of Trump Media. Donald Trump Jr. serves as trustee and holds sole voting and investment power over the securities owned by the trust. House Judiciary Committee Ranking Member Jamie Raskin opened an investigation into Truth API on July 31, seeking records concerning its development, pricing, subscribers, communications with government officials and safeguards surrounding its use. The government information, the social platform distributing it, the financial firms purchasing faster delivery and the president’s financial interest in the company now occupy the same factual chain. (SEC)

Donald Trump Jr.’s position extends further into prediction markets themselves. Kalshi appointed him a strategic adviser in January 2025. He later became an adviser to Polymarket after 1789 Capital, the investment firm where he is a partner, invested in the company. On August 27, Raskin opened a separate congressional investigation into 1789 Capital and demanded records concerning its investments, contacts with federal officials and government decisions affecting portfolio companies. The inquiry specifically identifies Polymarket. According to the committee, 1789 invested before a sequence of federal decisions helped reopen the U.S. market to Polymarket, whose valuation subsequently climbed dramatically. The same investigation examines other 1789 investments that were followed by major federal contracts, grants or regulatory actions. (Kalshi News)

Trump Media is simultaneously positioning Truth Social alongside prediction markets commercially. The company originally planned a direct prediction-market integration with Crypto.com. In August it replaced that arrangement with a marketing agreement that will promote Crypto.com prediction-market products to Truth Social users. Trump Media’s leadership has told investors that the company sees greater opportunity as a distribution and data partner and is examining prediction-market opportunities for its licensing business. Presidential communications, institutional data feeds, high-frequency traders and event-contract markets are no longer separate subjects. They are becoming parts of the same commercial infrastructure. (SEC)

Then comes Gabriel Perez.

On August 28, the CFTC announced an enforcement order against the former White House teleprompter operator. Perez had access to presidential speeches before Trump delivered them. Between December 2025 and February 2026, he used that access to trade contracts predicting words and phrases the president would say. The CFTC found that he misappropriated material, nonpublic information obtained through his federal employment and breached his duty of trust and confidence. He generated $107,539.02 in profit. The commission ordered him to surrender the entire amount, pay an additional $65,000 civil penalty and accept a three-year trading ban. (CFTC)

Perez turns the broader concern into an established federal insider-trading case originating inside the White House. His offense depended on a simple advantage: he knew presidential information before everyone else. Congress is trying to stop lawmakers from converting the same category of informational advantage into stock profits. Congress is now trying to stop elected officials and national-security personnel from exploiting it through prediction markets. Federal prosecutors are charging people who use classified or confidential information to make prediction-market fortunes. Trump Media is selling high-speed delivery of influential government communications to trading firms for as much as $100,000 a month. Trump Media is examining prediction-market data opportunities. Donald Trump remains the sole beneficiary of the trust holding roughly 41.5 percent of that company. Donald Trump Jr. controls the trust’s securities, advises Kalshi, is connected to Polymarket through 1789 Capital, and is a partner in an investment firm now facing a congressional investigation over the relationship between its investments and subsequent federal action.

The teleprompter is therefore the smallest object in a much larger story. The valuable commodity is foreknowledge. Government creates it every day through decisions, speeches, military plans, regulatory actions and policy announcements. Modern markets can price that knowledge immediately. Technology can deliver it in milliseconds. Prediction contracts can convert it directly into cash. Federal law already recognizes the corruption created when public servants profit from information entrusted to them through public power. Gabriel Perez crossed that line from inside the White House and made more than $107,000 before federal regulators caught him. The surrounding financial system shows why his case matters far beyond one employee. The market for knowing first is already here.