Prohibited Conduct Insider Info and Manipulation

Prediction markets rely on fair participation. Platforms typically publish rules and policies that define what behavior is not allowed, and those policies exist to protect users and maintain market integrity. If you trade using unfair advantages or try to distort prices, you can harm other participants and undermine the market’s purpose.

This section explains the most common categories of prohibited conduct, with a focus on insider information and manipulation. It is not legal advice. Always follow the platform’s rules and applicable laws.

What “Prohibited Conduct” Means

Prohibited conduct is behavior that a platform does not allow because it creates an unfair market, deceives participants, or interferes with normal trading and settlement. Exact definitions vary by platform, but the core idea is consistent.

Platforms generally prohibit conduct that involves:

• unfair information advantage obtained through improper means
• intentional distortion of prices or market activity
• deception, misrepresentation, or coordinated abuse
• interference with platform operations, accounts, or systems

If the platform’s rules forbid it, or if it relies on deception or unfair access, treat it as prohibited.

Insider Information and Material Nonpublic Information

In US market language, insider information is often described as material nonpublic information. “Material” means a reasonable person would consider it important when deciding how to trade. “Nonpublic” means it is not broadly available to the market.

In prediction markets, material nonpublic information can include:

• confidential election administration details not released publicly
• unreleased economic data or official statistics before publication
• internal decisions at an organization that determine a market outcome
• nonpublic information from an employer, client, or partner that directly affects settlement

The key issue is not whether you personally “worked for it.” The issue is whether the information is confidential, not available to the general market, and relevant to the contract’s outcome.

Misuse of Insider Information

Platforms typically prohibit trading or encouraging others to trade based on material nonpublic information, especially when it was obtained through a position of trust, access, or confidentiality.

Misuse can include:

• trading directly on confidential information
• tipping, meaning sharing the information so others can trade on it
• coordinating trades based on information that is not public
• using restricted access, credentials, or privileged systems to gain an advantage

A responsible rule of thumb is simple. If you would not feel comfortable explaining the source of your information in plain terms, assume you should not trade on it.

Manipulation and Other Forms of Market Abuse

Manipulation is behavior intended to distort market prices, perceived demand, or apparent activity rather than reflecting a genuine view of the outcome.

Common forms of market manipulation that platforms often prohibit include:

• creating artificial price moves that do not reflect real belief
• placing orders with the intent to mislead other traders about supply or demand
• trading in a way that creates a false impression of market interest or momentum
• coordinated behavior designed to push a market toward a narrative rather than evidence

The key concept is intent. Trading to express a view is normal. Trading to mislead others about the market is not.

Collusion, Misrepresentation, and Misuse of the Platform

Integrity policies usually also prohibit behavior that undermines fair access and honest participation, such as:

• collusion, coordinating with others to mislead or exploit participants
• misrepresentation, falsely claiming certainty, “inside” knowledge, or official backing
• using multiple accounts to evade rules, limits, or enforcement
• attempts to circumvent restrictions, controls, or verification requirements
• harassment or coercion aimed at influencing outcomes or platform decisions

Even when something is not labeled “manipulation,” it can still be prohibited if it is deceptive or intended to evade platform safeguards.

Your Responsibility as a Participant

Responsible participation means you trade based on publicly available information and your own analysis, while respecting platform rules and the integrity of the market.

Before trading, know:

• the platform’s integrity policy and prohibited conduct rules
• whether you have access to any confidential or restricted information
• whether your behavior could be perceived as deceptive or coordinated abuse

If you are unsure whether information is appropriate to use, the safest choice is not to trade on it. In the next sections, you will learn why integrity matters in practice and how suspicious activity may present itself from a user perspective.