End Prediction Market Corruption Act

Bill Summary: End Prediction Market Corruption Act (S 4017)

Overview

The End Prediction Market Corruption Act is a legislative proposal designed to prevent high-ranking government officials from leveraging their positions or nonpublic information to profit from "event contracts" (prediction markets). By banning certain officials from trading these contracts and imposing strict disclosure requirements, the bill aims to eliminate conflicts of interest and prevent insider trading based on government actions or outcomes.

Key Provisions

1. Trading Bans

The bill establishes a two-tiered system of prohibitions on the purchase, sale, or exchange of event contracts (contracts based on the occurrence or extent of a specific event):

• Strict Ban for Top Officials: The President, Vice President, and all Members of Congress are completely prohibited from trading any event contracts.
• Conditional Ban for Senior Executive Branch Officials: Senior officials are prohibited from trading event contracts that relate to matters in which they are "personally and substantially" involved through their official duties (e.g., decisions, approvals, investigations, or recommendations).

2. Enforcement and Penalties

To ensure compliance, the bill introduces several enforcement mechanisms:
* Civil Actions: The Attorney General is authorized to bring civil suits against violators.
* Financial Penalties: Violators may be subject to a civil penalty of up to $10,000 per violation, or the total profit made from the illegal trade, whichever is greater.
* Foreign Oversight: Foreign boards of trade must submit quarterly reports detailing any prohibited trades by covered U.S. officials. Failure to report can result in the revocation of their registration.
* Insider Trading Rules: The Commodity Futures Trading Commission (CFTC) is mandated to create rules prohibiting the use of material nonpublic information to profit from event contracts.

3. Enhanced Financial Disclosure

The bill expands existing financial disclosure laws to include specific transparency regarding prediction markets:
* Annual/Termination Reports: "Covered reporting individuals" (including senior branch officials), their spouses, and dependent children must disclose whether they traded event contracts and the value of those contracts.
* Transaction Reports: Covered individuals must file a report within 30 to 45 days of an event contract transaction, detailing the nature and value of the contract.

Who is Affected?

• High-Level Elected Officials: The President, Vice President, and Members of Congress.
• Senior Executive Branch Officials: High-ranking officers and employees of the executive branch.
• Family Members: Spouses and dependent children of covered reporting individuals (via disclosure requirements).
• Market Entities: Foreign boards of trade and designated contract markets.

Timeline and Procedural Status

• Introduced: March 5, 2026.
• Current Status: The bill has been read twice and referred to the Committee on Agriculture, Nutrition, and Forestry.