Key Insights
- Individual’s actions in the markets are given greater consideration in the case of CFTC mention as it has direct impact on the result of the contracts.
- Recent enforcement cases illustrate how privileged information can be used to give an advantage in conduct-based prediction contracts.
- Exchanges are likely to require more stringent verification, monitoring and manipulation safeguards prior to listing such products.
CFTC mention markets face tighter scrutiny after regulators warned that contracts tied to personal conduct can carry manipulation risks. The Commodity Futures Trading Commission issued an advisory on September 22 covering contracts tied to specific words, appearances, attendance and interactions.
The guidance applies to designated contract markets operating under the Commodity Exchange Act. It says these products should only be listed in limited circumstances with adequate safeguards.
Why the CFTC raised concerns
The CFTC said mention markets create risks because outcomes depend on the conduct of named individuals. Such conduct may not be independently generated or easily verified by other market participants.
The CFTC today issued an advisory that addresses the listing and trading of event contracts for "mentions markets" such as if a specific person will attend an event or mention certain words during an event.
CFTC declares the contracts "present a heightened risk of manipulation."
— RLinnehanSR (@RLinnehanSR) September 22, 2026
The advisory covers contracts involving speeches, social media posts, earnings calls, public appearances and personal interactions. Regulators said individuals or people around them could potentially influence contract outcomes.
The agency said these contracts may therefore be presumptively susceptible to manipulation. However, the advisory does not automatically prohibit every mention market.
Exchanges can potentially address those concerns through stronger contract designs and effective surveillance systems. Independent verification and substantial public scrutiny are important factors under the guidance.
The CFTC also wants exchanges to assess external pressure that could affect the person involved. Legal, professional, contractual, fiduciary and organizational obligations must also receive consideration.
Enforcement cases add pressure
Recent enforcement actions provide context for the regulator’s concerns. Gabriel Perez, a teleprompter operator, at the White House is facing financial penalties tied to presidential speech contracts.
The Commodity Futures Trading Commission or CFTC has ordered Perez to return $107,539.02 and pay a $65,000 penalty. These actions stem from alleged violations related to those speech contracts. He also received a three-year trading ban.
The regulator found that Perez used advance access to presidential speeches while trading related prediction contracts. His federal employment gave him access to information before President Donald Trump delivered speeches.
KalshiEX assisted the CFTC investigation into Perez’s trading. The case was a focus on the issues facing traders who had access to inside information.
Former Representative George Santos faced another enforcement case involving a conduct-based contract. The CFTC said Santos traded contracts linked to his expected attendance at the 2026 State of the Union.
Santos was ordered to pay a $17,569.98 penalty and to pay a civil penalty of $17,500. He also got slapped with a three-year ban by the regulator on trading.
Kalshi later imposed a permanent suspension on Santos. The cases have increased attention on contracts where individuals may influence outcomes.
Effects of the Market
The latest guidance could require exchanges to conduct deeper reviews before listing new CFTC mention markets. Platforms can be more heavily monitored and with more definite terms and conditions for settling.
Kalshi continues to offer some political mention contracts despite the regulatory scrutiny. Available contracts include markets linked to words Trump may use during United Nations events. The exchange previously removed sports-related mention contracts while the CFTC examined manipulation concerns. Political and corporate contracts remained available.
The guidance could also influence future Part 40 submissions by regulated exchanges. Platforms are expected to explain manipulation risks and the controls designed to address them. The wider prediction market industry is also facing increased regulatory attention. CFTC data showed federally registered prediction markets exceeded $25 billion in trading volume during 2025.
The agency is separately considering changes to Regulation 40.11. The proposal would establish a formal review process for certain event contracts. For CFTC mention markets, contract design and independent verification will remain central regulatory issues. Exchanges must demonstrate that listed products satisfy existing market integrity requirements.
Information access is also emphasized as a key factor in the guidance. Penalties for individual misbehavior may offer benefits for the advance notice participants.
Conclusion
The CFTC advisory raises the level of scrutiny on prediction contracts that are tied to individual behavior. The CFTC advisory does not put a ban in place yet it creates a stronger focus, on compliance.
Exchanges will need to examine settlement mechanics, external influence and information access before listing new products. The approach could shape how prediction platforms develop speech, appearance and conduct-based contracts.
