The U.S. Commodity Futures Trading Commission warns that financial products based on “mention” contracts, which depend on what a named person says, attends, or does, are high risk and easily rigged.
On September 22, the CFTC’s Division of Market Oversight issued an Advisory on event contracts based on words or phrases, appearance at events, and interaction between individuals. The Advisory is staff guidance, not a new Commission rule, and does not create new legal obligations.
Designated contract markets also must abide by the Commodity Exchange Act, which requires, itself, Core Principle 3, which states that a contract should not readily be susceptible to manipulation.
The regulator’s concern is that, unlike contracts based on economic releases or other events produced independently, a mention market pays out on an event whose outcome is entirely dependent on just one person or a small group.
A speaker who purposely said the word triggering the settlement, or someone holding a script, prepared remarks, or guest list, could learn the decision ahead of traders.
CFTC staff therefore provided that these products may be viewed as “presumptively readily susceptible to manipulation”. This does not mean that the products are per se illegal. An exchange may be able to show that contract design, independent verification, public scrutiny, and surveillance controls adequately diminish the risks.
For instance, in August, the CFTC ordered $107,539.02 to be forfeited and $65,000 to be paid as a civil money penalty by Gabriel Perez, a former teleprompter operator for the White House, who voluntarily settled charges that he traded mentions contracts multiple times between December 2025 and February 2026 by using advance access to presidential speeches. Perez was banned from trading for three years.
Former representative George Santos was charged with trading options based on his decision to attend the 2026 State of the Union and making public statements of his plans to attend the State of the Union. Santos was ordered to pay $17,569.98 and $17,500 in precuniary penalties, and received a three-year ban on trading.
Meanwhile, the advisory does not prohibit mention markets generally but heightens compliance requirements for exchanges that submit Part 40 products for approval.
Platforms should have policies for identifying people able to materially affect outcomes, assessing potential insider access and explaining limitations on positions, establishing reporting, recordkeeping and surveillance to detect attempts to manipulate or misuse nonpublic data.
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At the same time, prediction-market regulation in the United States is in flux, with the CFTC considering changes to its event contract framework and several lawsuits addressing the relationship between federal derivatives regulation and state gambling regulation.
For designated contract markets, however, a new, mentioned contract must be evaluated in light of the product-specific characteristics of the contract, and the exchanges must explain how the proposed contract would be in compliance with applicable federal integrity standards when it depends on the words, presence, or conduct of a particular person.
