AI surveillance tool brings prediction markets under compliance watch

Compliance departments have spent much of 2026 deciding whether employees’ bets on Kalshi and Polymarket belong under formal policy or oversight. Now a software vendor is betting that financial services firms will want to watch employee trades on prediction markets the same way they monitor stock trades for potential insider trading

MyComplianceOffice, the compliance technology provider known as MCO, has extended its personal trading and digital asset controls to prediction markets. It paired the launch with AI-assisted surveillance of employee messages on collaboration platforms including Telegram and Slack.

The company's update pulls an employee’s messages, trades, conflicts of interest, disclosures and exposure to material nonpublic information into a single review process. That lets compliance investigators weigh a trade alongside the employee's conversations surrounding prediction markets.

"We're categorizing the different types of predictions that come in into different areas and flagging them based on whether it's a security based or company based activity, as opposed to let's say sports betting," John Kearney, director of product management at MCO, told InvestmentNews. "We're also looking to get more into using AI to see if we can take the actual prediction and tie it back to an individual business entity, or stock market activity like a merger or acquisition."

Combined monthly volume on Kalshi and Polymarket more than doubled to $53 billion in July from $26 billion in May, according to Pew Research Center data. More than 1,500 companies across financial services are clients of MCO, with about half being RIAs, Kearney said.

"I would say maybe a year ago we weren't hearing that much about prediction markets, and now with the CFTC taking action against a number of people, suddenly people's antennae are up," said Kearney. "It's been shown that once firms start monitoring employee trading, that any sort of insider trading activity drops hugely."

In June, Schwab said it would enter prediction markets through Cboe Global Markets, offering customers contracts on the S&P 500’s closing price. Robinhood, Coinbase, and Interactive Brokers are other brokerages that offer prediction markets trading via Kalshi and other platforms.  

In July, Goldman Sachs barred staff from betting on contracts tied to specific companies, elections, market performance, economic data and geopolitics, though sports and entertainment contracts remain allowed. Point72 Asset Management and Balyasny Asset Management went further earlier in the year, banning personal-account trading on the platforms outright, Bloomberg reported. JPMorgan Chase has taken a softer line, issuing guidance that asks employees to limit participation in markets involving the bank, according to Barron's.

Regulators have raised the stakes. In February, the Commodity Futures Trading Commission’s (CFTC) enforcement division reminded traders that it can pursue the misuse of confidential information on prediction markets. In July, a White House teleprompter operator was placed on unpaid leave amid a CFTC investigation into alleged Kalshi bets. The regulator also investigated an insider trading case involving an employee of YouTube influencer MrBeast.

Adam Phillips, managing director of investments at EP Wealth, a California-based RIA with about $50 billion in client assets, told InvestmentNews in July that the firm had not yet added a policy. “Currently there’s no company-wide policy as it relates to prediction markets,” he said at the time.

Software vendor StarCompliance has partnered with Kalshi to give employers visibility into staff trades on the exchange. The 24/7 trading nature of prediction markets adds another stress point for compliance departments, said Kearney. 

"In relation to employees having access to material, non-public information and trading on that, prediction markets is our latest ability to get around any controls firms have," said Kearney. "You've got the ability [on prediction markets] to bet on price, earnings, mergers, whatever you want. So that's something that a lot of our clients have been asking us about. They see it as something that gets around a lot of their control."

MCO recently secured more than $100 million in funding from Accel-KKR Credit Partners. The company has offices in New York, Texas, Singapore, London, Dublin, and South Africa. Ion Analytics reported in January 2026 that MyComplianceOffice was exploring a potential sale with Raymond James serving as its financial advisor.