Kalshi Found Some Insider Traders
Also hedge fund hiring, OpenAI shorts, midnight M&A deadlines and Claude for hackers.
Last year, on X, Bill Ackman proposed a trade for Eric Adams. Adams was at the time running for re-election as mayor of New York, and he was way behind in the polls. Ackman believed that it would help Andrew Cuomo, Ackman’s preferred candidate, if Adams dropped out of the race. To encourage this, Ackman argued that Adams should go on Polymarket, the prediction market, and buy contracts predicting a Cuomo win at about 15 cents on the dollar, and then he should drop out of the race, instantly pushing up the price of the Cuomo contracts and making him a quick profit. “There is no insider trading on Polymarket,” Ackman wrote, meaning not “nobody insider trades on Polymarket” (lol they do) but rather “there are no rules against insider trading on Polymarket.”
Was this right? We discussed it at the time, and I pointed out that, in the narrow sense, Ackman was probably wrong; in fact there are rules against insider trading on US prediction markets.1 But US insider trading rules are weird, and I wrote:
