Wall Street’s Top Cop Expects Enforcement on Prediction Markets

Wall Street’s top cop expects regulators to take actions tied to prediction markets following a surge in trading on the platforms over the past year, saying that simply making bets outside of traditional spaces “doesn’t insulate you from fraud.”

Manhattan US Attorney Jay Clayton made the comments Thursday during a speech at the Securities Enforcement Forum in New York, telling the audience that prediction markets are “an area that I am looking at.”

“What is the applicable law? Let’s say I have a big stock position,” Clayton said. “The stock’s trading at $130, there’s a prediction market that pays if ...