CFTC Chair Selig Says States are Undermining the Agency’s "Exclusive Jurisdiction" Over Prediction Markets

Plus Rep. Maxine Waters criticizes the SEC's partisan composition and recent regulatory rollbacks.

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Jaime Guerrero has joined Cetera Financial Group as Associate General Counsel.

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States Encroach on Prediction Markets

The Commodity Futures Trading Commission for decades has overseen regulation of prediction markets—or event contracts, as we refer to them—that help market participants hedge risk, aggregate information and test hypotheses about future outcomes.

In recent years, states have waged legal attacks on the CFTC’s authority to regulate these financial instruments. If they succeed, participants would be barred from access to federally regulated event-contract markets. So it should come as no surprise that the commission is filing a friend-of-the-court brief Tuesday supporting Crypto. com in the Ninth U.S. Circuit Court of Appeals.

Well-known CFTC-registered exchanges used by tens of millions of Americans—including Kalshi, Polymarket, Coinbase and Crypto. com—face an onslaught of state-driven litigation across the country, with nearly 50 active cases presenting a range of legal challenges. The most common allegation is that these contracts are a form of gambling and therefore subject to state laws. The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction over these markets by seeking to establish statewide prohibitions on these exciting products.

by WSJ Op-Ed

👉 CFTC Chairman Michael Selig had an interesting op-ed in yesterday’s WSJ.

Selig wrote that the under the plain language of the Commodity Exchange Act, event contracts in prediction markets are “swaps” and that Congress expressly granted the CFTC comprehensive authority over any such contract based on a commodity. He stated:

“The statutory definition of “commodity” is extraordinarily broad and includes practically all goods, articles, services, rights and interests except for onions (due to a history of market manipulation) and movie box-office receipts (because of Hollywood lobbying).”

Note: This is not Commodities Docket, we do not know about onions and movie tickets here. We focus on orange groves. 🍊

US Lawmaker Blasts SEC Crypto Overhaul—Bulls See Regulatory Reset Powering the Next Rally

Congresswoman Maxine Waters, the top Democrat on the House Financial Services Committee, shared on Feb. 11 concerns about the direction of the U.S. Securities and Exchange Commission (SEC), including its oversight of digital assets, during a full committee hearing focused on the agency.

Addressing SEC Chair Paul Atkins directly, she stated: “You and I have a very different understanding about what is happening at the SEC.” She continued: “Chairman Atkins said it is ‘a new day for the SEC.’ What did he mean? Did he really mean that this SEC is now putting Wall Street and billionaires first, and America’s investors last?” […]

During the hearing before Committee Chairman French Hill, Waters also criticized the agency’s structure and recent regulatory rollbacks. […]

“Today the SEC does not have a single Democratic commissioner. Again, this is extraordinary. And the SEC is not making policy in an open and bipartisan manner, with the usual public notice-and-comment process.”

“Instead, Atkins’ SEC appears to take its orders directly from the President, and avoids public comment at all costs,” she opined.

by Bitcoin. com

👉 The SEC’s current approach to enforcing the crypto markets was discussed in detail at Securities Enforcement Forum New York in the panel called, “Cyber and Emerging Technologies: SEC Rulemaking, Enforcement, and "Job No. 1" (Crypto).” The panel was moderated by Haimavathi Marlier (Morrison & Foerster) and featured Gregory Baker (Patterson Belknap), David Hirsch (McGuireWoods), Samantha Lawson (Coinbase) and
Ladan Stewart (White & Case).

You can watch the full panel below.

SEC Polices Affinity Fraudsters Despite Enforcement Sea Change

The regulator has brought at least 10 complaints in the past year alleging defendants ran Ponzi-style schemes and engaged in other efforts to solicit investments from religious, cultural, or ethnic groups, according to a review by Bloomberg Law. That’s roughly in line with the volume of similar cases the SEC brought under the final year of Biden-era Chair Gary Gensler, whose agency took an aggressive stance toward rooting out affinity fraud.

The SEC under Chairman Paul Atkins has been less outspoken about its affinity cases, but they align squarely with his plans to prioritize outright fraud and investor harm, while largely ditching his predecessor’s focus on crypto-related infractions and registration errors.

“This is an administration that has been very vocal about its focus on retail investors, and there are certainly some priorities from one administration to the next that stay evergreen,” said Carolyn Welshhans, a partner at Morgan Lewis and former associate director of the SEC’s enforcement division. “In that respect, affinity fraud is definitely one.”

by Bloomberg Law

Securities Enforcement Forum New York 2026: Shifting Priorities and Emerging Risks

… Unsurprisingly, recent enforcement actions suggest a focus on clear fraud cases with definable investor harm. However, delays in SEC enforcement activity did not go unnoticed. Panelists noted staffing concerns, as significant departures have resulted in lost institutional knowledge, and newer investigators require more education from defense counsel. Regional director absences and a prolonged shutdown have also contributed to delays in activity.

As federal SEC enforcement declined, state attorney general activity showed a slight uptick in 2025, ranging from Ponzi schemes to broker fee cases to insider trading. However, panelists cautioned that state enforcement has been “episodic” due to resource constraints and varying levels of expertise. It also increases uncertainty as other regulators may take a different approach to issues than the SEC. For example, the New York Attorney General’s (NYAG) case against Emergent BioSolutions, Inc. and its CEO had an unusual result. Although the SEC had brought a disclosure case in April 2025, the NYAG subsequently brought an insider trading action, including charges against the company for approving a trading plan when it should not have. Panelists found this “unusual” and noted it “adds a lot of uncertainty” for corporate clients, as the SEC traditionally would not charge a company for executive insider trading in this manner.

by Perkins Coie

👉 Article by Pravin Rao and others at Perkins Coie.

Japan Watchdog Probes Mizuho Securities Over Suspected Insider Trading

Mizuho Financial Group Inc.’s brokerage unit said it is under investigation by Japan’s financial watchdog, after the Nikkei newspaper reported its staff are suspected of insider trading.

The employees under suspicion by the Securities and Exchange Surveillance Commission are from the investment banking division, the newspaper reported, without saying where it got the information.

Mizuho Securities said in a statement that it’s fully cooperating with the probe and can’t comment further because the investigation is ongoing. A representative for the SESC declined to comment.

by Bloomberg

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👉 More from Andrew Courtney: "Imagine Google employees all fighting to be the first one to insider trade. 'This year is my turn. I get to trade on it.'"

"Part of your bonus package: 24 hours to insider trade on the most searched person this year instead of stock options. How about that?"