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Google employee charged with $1M Polymarket insider trading bet on search term

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Re: Google employee charged with $1M Polymarket insider trading bet on search term

#31

Post by solarkraft »

SpicyLemonZest wrote: post #24
nostrademons wrote: post #11

Earlier quoted context omitted.

That's sort of the point of prediction markets: they surface insider information by allowing people to profit off of it. The benefit is to people watching the prices , who can then use that information to make better decisions ahead of the answer being revealed to the public. It's not necessarily to market participants, who need to be aware of who else is trading the market and have a credible reason to believe they…

What Polymarket says on the topic ( https://integrity.polymarket.com/ ) is that they do not surface insider information and you mustn't trade if you have any. Because the prediction market community is filled with liars and fraudsters, of course, it does seem to be common knowledge that this restriction isn't meant to be taken seriously, much like Polymarket's fake rule that Americans aren't allowed to use it. But on…

The odds have shown to be largely correct, thanks to people profitably arbitraging away inaccuracies.

Re: Google employee charged with $1M Polymarket insider trading bet on search term

#33

Post by nostrademons »

Domenic_S wrote: post #22
nostrademons wrote: post #11

Earlier quoted context omitted.

That's sort of the point of prediction markets: they surface insider information by allowing people to profit off of it. The benefit is to people watching the prices , who can then use that information to make better decisions ahead of the answer being revealed to the public. It's not necessarily to market participants, who need to be aware of who else is trading the market and have a credible reason to believe they…

Hmm, not following. The insider trade in this case was small enough to not change the lines meaningfully, no? D4vd's chances of being #1 went from 99% nearly overnight, was a huge upset. Polymarket might be different, but conventional Vegas-style lines change with the amount of $$ bet, if the pool is $50M and an insider bets $10k on the long shot, the line isn't moving -- I don't see how insider information can be su…

Because these markets aren't all that efficient yet (possibly because other potential market participants are scared off by insider trading charges). You don't have multiple people that all have insider information betting against each other, you have one person with insider information that cleans out everybody else. If this repeats enough, all the people without insider information will get cleaned out and exit the market, all the other people with insider information will enter the market for profit, and prices should converge to true likelihood.

And yes, the whole purpose of prediction markets is to turn insider info into public info.

Re: Google employee charged with $1M Polymarket insider trading bet on search term

#34

Post by awongh »

nostrademons wrote: post #11
wyldfire wrote: post #5

Of course he should be punished but the best lesson here is for bettors. Those who wager on "prediction markets": you are betting against people who have access to more information or can influence the outcome of the wager. Don't waste your money.

That's sort of the point of prediction markets: they surface insider information by allowing people to profit off of it. The benefit is to people watching the prices , who can then use that information to make better decisions ahead of the answer being revealed to the public. It's not necessarily to market participants, who need to be aware of who else is trading the market and have a credible reason to believe they…

The unfortunate thing is that, while their academic position sounds plausible on paper, just like with most crypto things it's just a money grab.

How many crypto people (with legitimate backgrounds just like the founders of Polymarket and Kalshi) stood up and said big things about freedom and the unbanked etc., turns out they were literally just scamming people- there are so many examples besides FTX.

Letting people bet on any random thing is not at all related to this "price everything" theory. If that was their real goal they wouldn't behave so much like a normal sports betting company. I have yet to actually hear anyone defend their actual actions in a plausible way.

Re: Google employee charged with $1M Polymarket insider trading bet on search term

#35

Post by hellojesus »

mikeyouse wrote: post #16
nostrademons wrote: post #11

Earlier quoted context omitted.

That's sort of the point of prediction markets: they surface insider information by allowing people to profit off of it. The benefit is to people watching the prices , who can then use that information to make better decisions ahead of the answer being revealed to the public. It's not necessarily to market participants, who need to be aware of who else is trading the market and have a credible reason to believe they…

That’s the academic theory behind these markets, but there’s no actual value to knowing who the most searched celebrity will be or any of this other garbage. It’s just an unregulated casino with guesses about the popularity of Google searches instead of guessing black or red.

If it's unregulated, how are people getting charged with insider trading?

Re: Google employee charged with $1M Polymarket insider trading bet on search term

#36

Post by winter_blue »

kingleopold wrote: post #7

So now the real bet he lost is salary + time for all those years he is going to prision + lower job for decades after prison. This person bet Millions to get $1M basically and lost both, very rare gambling level lost from smart(used to) person. At least normal gambler loses what they have and some debt.

He was Staff-level as well. That's minimum $500k a year or more. And tenure often grows pay disproportionately at Google. That's easily $20 million lost.

Re: Google employee charged with $1M Polymarket insider trading bet on search term

#37

Post by mortsnort »

Why are we wasting government money cracking down on Polymarket betting? The most offensive thing in this article is the government pretending Polymarket bets are securities. Prediction markets provide no benefit to society and don't need to exist.

Re: Google employee charged with $1M Polymarket insider trading bet on search term

#38

Post by Domenic_S »

nostrademons wrote: post #33
Domenic_S wrote: post #22

Earlier quoted context omitted.

Hmm, not following. The insider trade in this case was small enough to not change the lines meaningfully, no? D4vd's chances of being #1 went from 99% nearly overnight, was a huge upset. Polymarket might be different, but conventional Vegas-style lines change with the amount of $$ bet, if the pool is $50M and an insider bets $10k on the long shot, the line isn't moving -- I don't see how insider information can be su…

Because these markets aren't all that efficient yet (possibly because other potential market participants are scared off by insider trading charges). You don't have multiple people that all have insider information betting against each other, you have one person with insider information that cleans out everybody else. If this repeats enough, all the people without insider information will get cleaned out and exit the…

But you just said "The benefit is to people watching the prices" -- but if the odds haven't properly converged what information does watching the prices get you before-the-fact?

Maybe I'm just not getting it, could you lay out a scenario?

Re: Google employee charged with $1M Polymarket insider trading bet on search term

#39

Post by burnhamup »

I was curious how a man in Switzerland gets charged in the US for a placing bets on a site that doesn't allow the US to participate.

The short answer seems to be that he stole private information from a US company and used that information to enrich himself. And then got that charge enhanced with things like wire fraud and transacting on systems involving US currency.

And another commentor suggests that punishing insider traders in a step towards legitimzing and regulating prediction markets in the US.

Re: Google employee charged with $1M Polymarket insider trading bet on search term

#40

Post by 55555 »

nostrademons wrote: post #11
wyldfire wrote: post #5

Of course he should be punished but the best lesson here is for bettors. Those who wager on "prediction markets": you are betting against people who have access to more information or can influence the outcome of the wager. Don't waste your money.

That's sort of the point of prediction markets: they surface insider information by allowing people to profit off of it. The benefit is to people watching the prices , who can then use that information to make better decisions ahead of the answer being revealed to the public. It's not necessarily to market participants, who need to be aware of who else is trading the market and have a credible reason to believe they…

It barely makes sense, though? The idea is that it will surface insider information to the public. That happens only because the insider is financially incentivized to place a bet. But they will only bet if they can win money, and they can only win money if someone is taking the other side of their bet, which necessarily means someone without their insider information.

In other words, prediction markets require suckers to lose money to insiders in order for the public to learn new information. In this case, people lost over a million dollars to an insider so the public could learn that "d4vd" was searched a lot.

Is this good?

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