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US Serviceman and KPMG Employee Face Insider Trading Allegations

By jili tutorial · August 31, 2026

US Serviceman and KPMG Employee Face Insider Trading Allegations

Overview of New Insider Trading Charges

A fresh wave of criminal charges is emerging against several individuals accused of using insider information to trade on prediction markets. The cases involve a US service member who allegedly traded on military actions and a KPMG employee who reportedly traded on public company earnings.

According to The Wall Street Journal, the serviceman placed successful bets on Polymarket related to US military operations in Iran and Venezuela. The KPMG employee is accused of leveraging privileged information to wager on whether a specific public company would exceed consensus estimates for quarterly earnings. KPMG, a major accounting firm, has not commented on the case, though the employee may have accessed confidential financial data before its public release.

Growing Criminal Cases Against Polymarket Users

If these charges proceed, they will add to two ongoing criminal cases in the United States against American soldier Gannon Ken Van Dyke and Google engineer Michele Spagnuolo. Both are accused of using insider information to profit on Polymarket’s prediction markets.

Additionally, two Israeli military officers have been arrested in Israel for trading on markets related to the Middle East conflict on Polymarket. The first Israeli Air Force officer arrested in February claimed that wagering on prediction markets is widespread among servicemen.

War-related markets are not permitted in the United States, but Polymarket continues to offer users the ability to wager on military actions through its international platform. The site is banned in over 40 countries worldwide, though Israel is not among them.

Over 150 Accounts Flagged for Suspected Military Insider Trading

The Anti-Corruption Data Collective published a report earlier this month raising suspicions of insider trading in military-related markets on Polymarket. The report identified 152 accounts that made substantial profits wagering on these controversial markets.

Polymarket stated that it has referred nearly 100 accounts to authorities based on signs of suspicious trading. The company said it conducts surveillance for any trades violating its policies but declined to comment specifically on the cases involving the serviceman and the KPMG employee. The Wall Street Journal reported that the Commodity Futures Trading Commission (CFTC), along with prosecutors in New York and Washington, are involved in these cases.

Defense Lawyers Argue US Lacks Authority Over Markets

In addition to the Department of Justice, the CFTC has filed charges against both Spagnuolo and Van Dyke, alleging violations of the Commodity Exchange Act (CEA). Van Dyke’s lawyers argue that the CFTC is overstepping its authority and that the markets he traded on do not qualify as swaps under the CEA.

Spagnuolo has also been charged with violating the CEA, along with wire fraud and money laundering. He allegedly used inside information from his position at Google to profit $1.2 million by trading on search-related markets at Polymarket. In a motion to dismiss the charges, Spagnuolo’s legal team similarly claimed that the markets he traded in should not be classified as swaps and therefore did not violate the CEA.

The motion cites Van Dyke’s case and the government’s response, which described his argument as an “academic objection” with “little relevance to this prosecution.” Spagnuolo’s lawyers contend that the definition of swaps is key to charging the Swiss resident. They present arguments similar to those made by gambling regulators who claim sports markets should be prohibited.

Additionally, they assert that the US government has no jurisdiction, as Spagnuolo is a non-US citizen wagering on a non-US platform.

CFTC’s Position and Ongoing Investigations

CFTC Chair Michael Selig stated that the agency has the ability to pursue cases involving offshore platforms in “extreme circumstances.” In the case involving the KPMG employee, it remains unclear whether the trading took place in the United States. The military serviceman would have been trading on Polymarket’s international platform, which continues to offer conflict-related markets despite the surge in insider trading cases.

While exercising its authority in criminal cases against individuals, the CFTC does not appear to have taken any action to prevent Polymarket from offering these markets.