Key facts
- Microsoft has updated its insider trading policy to specifically ban employees from using confidential information on prediction markets and event contracts.
- The policy states that employees in possession of material, nonpublic information cannot engage in transactions that provide economic exposure to companies, including through prediction markets.
- This update brings Microsoft's policy in line with regulatory scrutiny of insider trading on prediction market platforms.
- Previous versions of Microsoft's policy did not explicitly mention prediction markets or event contracts.
- The policy applies to information about Microsoft, its competitors, customers, vendors, or partners.
Microsoft has updated its insider trading policy to explicitly prohibit employees from using confidential information on prediction markets and event contracts. The updated policy, filed with the Securities and Exchange Commission, states that employees in possession of material, nonpublic information cannot trade in securities or engage in other transactions that provide economic exposure to companies, including through prediction markets.
Previous versions of Microsoft's policy did not specifically mention prediction markets or event contracts. The inclusion of these platforms comes amid increased scrutiny from federal regulators and the Department of Justice regarding suspected insider trading on such sites. An event contract is defined as the formal term for a financial stake a trader takes in a real-world outcome.
Both Kalshi and Polymarket, leading prediction markets, have seen significant trading volumes. Kalshi, for instance, recorded over $165,000 in trades related to Microsoft's recent quarterly earnings call and more than $27 billion in trades concerning the 2026 World Cup. Microsoft's policy is broad enough to cover information about competitors and economically-linked companies, not just Microsoft itself.
This development follows recent actions against individuals accused of using confidential information for betting. A Google software engineer was charged with violating the Commodity Exchange Act, wire fraud, and money laundering for allegedly using confidential Google information to make over $1 million on Polymarket. More recently, a White House teleprompter operator was reportedly put on leave after netting over $100,000 on Kalshi. Both Kalshi and Polymarket state they prohibit the use of nonpublic information and have systems to detect suspicious activity.