SEC Eyeing Its Authority to Regulate Prediction Markets

Prediction Markets Encounter Another Regulator as SEC Joins Fray

Prediction markets fighting to be under the sole purview of a small agency charged with overseeing derivatives trading may also find themselves in the watchful eyes of the regulator’s older sibling, as federal officials pursue next steps to police the multibillion-dollar industry.

The Securities and Exchange Commission, the larger Wall Street regulator that oversees various financial markets, broke its reclusive stance on prediction markets last week when it said it was seeking public commentary on the definitions of certain swaps and derivatives products. […]

The agencies’ joint request for comment potentially opens up prediction markets to enforcement at the hand of a bigger regulator, attorneys say.

The joint effort is a “welcome first step,” especially among two agencies that “haven’t always played ball,” said Jeremy Liabo, a partner at Ropes & Gray LLP who practices futures and derivatives law. It follows the agencies’ moves earlier this year to define which types of digital assets each will oversee.

Still to come is a longer regulatory process over whether certain contracts on public companies or “mention markets”—such as when the next iPhone will be released or what a CEO might mention on an earnings call—fit into the SEC’s bailiwick. The SEC could also wind up in court to determine whether it has any authority in this space.

SEC Probes Popular Private Equity Asset-Shuffling Technique

The US Securities and Exchange Commission is turning its attention to the potential for misconduct in a private equity product that’s become popular with asset managers struggling to sell their investments, a person familiar with the matter said.

The probe focuses on so-called continuation vehicles, said the person, who asked not to be identified discussing internal agency matters. The person didn’t name which firms or funds were part of the probe. Reuters first reported the investigation.

Continuation funds allow a private equity firm to transfer one or more companies from an existing fund to a newly created fund. Such transactions have been around for more than a decade but surged in recent years as private equity firms have faced a dealmaking drought.

Former CEO Of Special Purpose Acquisition Company Sentenced To Prison

United States Attorney for the Southern District of New York, Jay Clayton, announced today that VADIM KOMISSAROV, the former Chief Executive Officer of Trident Acquisitions Corp. (“TDAC”), a publicly traded special purpose acquisition company (“SPAC”), was sentenced to three years in prison for committing securities fraud in connection with a scheme to defraud TDAC investors and investors in TDAC’s successor company, Lottery.com Inc., by publicly reporting false and misleading revenue and business information. KOMISSAROV pled guilty to one count of securities fraud on February 3, 2026, before U.S. District Judge Alvin K. Hellerstein, who imposed today’s sentence. […]

According to the allegations contained in the Indictment and statements made in public filings and public court proceedings:

From November 2020 through May 2022, KOMISSAROV engaged in a scheme to defraud investors in TDAC and investors in TDAC’s successor company, Lottery.com (the “Revenue Scheme”). In short, KOMISSAROV and his confederates created the false appearance of revenue-generating business activity for AutoLotto, in advance of a vote by TDAC shareholders on a proposed merger between TDAC and AutoLotto, and later for Lottery.com through a series of sham transactions, including a fraudulent $9 million roundtrip transaction that KOMISSAROV engineered using the alias “Vlad.”

A Big Law CEO and Top GC Agree: AI Is Forcing a New Firm Model

It’s not every day that a Big Law chief executive declares the traditional law firm model will perish. Nor do general counsels from major companies often publicly state Big Law firms risk losing their competitive edge.

And yet, we heard both of those warning shots this week. It’s a sign that legal leaders believe artificial intelligence is quickly changing the competitive landscape. And one thing stands out: Both agree Big Law may not have a monopoly on the future.

Ford Motor Co. general counsel Steven Croley on Monday wrote that his in-house team was generating efficiencies from AI more quickly than Big Law firms.
He implored firms to act faster, writing that he would handle more work in-house while moving matters to firms that use AI to provide net savings. Smaller firms may have an advantage in that race, he wrote.

“Big Law’s historical advantages associated with economies of scale and the ability to provide ‘one stop’ legal services may become somewhat smaller in an AI world,” Croley wrote.

The next day, Cooley CEO Rachel Proffitt penned a wake-up call to Big Law leaders, saying firms that view AI as just another efficiency tool risk “weakening the very model that has sustained them.” New legal tech companies and AI native law firms are entering the competition almost daily, she wrote.