The U.S. Commodity Futures Trading Commission (CFTC) will prioritize enforcement against insider trading in prediction markets, manipulation in energy markets, spoofing, retail fraud, and willful violations of anti-money-laundering (AML) laws, the agency’s new enforcement director said Tuesday. 

David Miller, speaking at an event at New York University law school, said the CFTC was aware of speculation about insider trading in prediction markets and was monitoring the sector closely. Prediction markets, which allow traders to wager on binary outcomes tied to specific events, have drawn increased scrutiny after well-timed trades ahead of major policy announcements by President Donald Trump appeared to generate millions of dollars in profits for unidentified traders.

“Unfortunately, a myth has spread that insider trading is permissible, even encouraged, in the prediction markets,” Miller said in the speech. “Prominent individuals in finance, the media, and on social media have contended that insider trading law does not apply in these markets.  Some have suggested that insider trading is inevitable or beneficial because it gives people with confidential information a financial incentive to trade on it, thus releasing the information to the public.”

The CFTC will “aggressively detect, investigate, and, where appropriate, prosecute” such cases, he said. 

In the speech Miller also singled out manipulation in energy markets as especially harmful, saying higher prices in fuel markets can quickly hit consumers and ripple through the broader economy. Miller said periods of volatility tied to geopolitical events can create opportunities for would-be manipulators and warned that the CFTC remains focused on that area and will prosecute wrongdoing it finds.

The agency separately considers AML and know-your-customer violations to be among its top priorities, but won’t focus on technical issues, according to Miller.

“We are not prioritizing technical violations, but rather those who willfully decide to break these essential laws,” he said. “AML and KYC laws are essential in combatting terrorism, narcotrafficking, fraud, and other serious illegal activity and we will not tolerate any entity we regulate willfully violating those laws.  As you might expect, we will also initiate criminal referrals here as appropriate.”

Miller also said the CFTC plans to issue a new cooperation advisory that would offer clearer and more generous benefits to parties that self-report promptly, cooperate fully, and remediate misconduct. In some cases, he said, that could result in a declination absent aggravating circumstances. 

Read the speech here