WASHINGTON - Federal regulators are investigating whether a White House teleprompter operator may have possessed an unfair informational advantage while trading prediction markets on what President Trump would say in speeches, prompting officials to confront the previously unmodeled possibility that the person displaying the words might know the words.
The CFTC investigation involves Gabriel Perez, a longtime teleprompter operator who Reuters reported traded on Kalshi "mention markets" tied to whether particular words or phrases would appear in presidential remarks. Perez has not been convicted of wrongdoing and has said through counsel that he is cooperating.
Market participants reacted with disbelief.
"This would be like allowing the weather forecaster to bet on whether his own forecast says rain," said one prediction-market analyst before immediately creating a contract on whether regulators will use the phrase "material nonpublic information."
Kalshi reportedly froze Perez's account before more than $90,000 in profits could be withdrawn. Industry experts said the episode highlights a growing challenge for event markets, which transform nearly every observable feature of civilization into something a guy with three monitors can wager on.
Regulators are now expected to review whether other professions create problematic information asymmetries, including Oscars accountants trading award markets, Federal Reserve stenographers trading rate-decision contracts, and meteorologists looking suspiciously confident about tomorrow.
The White House has ended Perez's employment. Prediction traders are already offering 63 cents on whether his next job includes the phrase "compliance consultant."
