Marc Weinstein Examines Legal Challenges in Prediction Market Insider Trading Case with Law360

Marc Weinstein broke down a motion to dismiss criminal charges against a U.S. Army sergeant accused of using nonpublic information to place profitable trades on the prediction market platform Polymarket in an interview with Law360.

Federal prosecutors and the U.S. Commodity Futures Trading Commission (CFTC) allege that Master Sgt. Gannon Ken Van Dyke used classified information to earn more than $400,000 through prediction market trades related to the capture of Venezuelan President Nicolás Maduro.

The case, which is the first prosecution involving alleged insider trading in prediction markets, centers on whether the government can pursue commodity and wire fraud charges based on trades linked to confidential information obtained through military operations.

Discussing Van Dyke’s defense, Weinstein noted it focuses on legal arguments rather than attempting to justify the alleged conduct.

“The motion does a good job of sticking to the serious legal issues, as opposed to trying to justify the conduct itself, since the underlying facts here are not pretty,” he said.

Weinstein also addressed the defendant's challenge to the government's wire fraud theory. The motion argues that confidential information relating to a military operation does not qualify as property under Supreme Court and Second Circuit precedent because it is not tied to commercial activity.

“If these charges are legally infirm, as they make a strong case for, it also illustrates a gaping hole in the criminal statutory scheme if military or other government personnel are able to use highly classified and confidential government information for personal gain in advance of such information being in the public domain,” Weinstein said.

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