Arizona Governor issues executive order regarding potential insider trading

Arizona Governor Katie Hobbs has issued a new executive order to counteract potential insider trading efforts from government employees in the state, following the approval for a temporary restraining order from the Commodity Futures Trading Commission (CFTC) in April. 

While the approval did not grant prediction market operators authorization to begin conducting business in Arizona, the decision did represent a backtrack from state lawmakers and allowed Kalshi to avoid legal action. 

Within the executive order, Hobbs prohibits all Arizona executive branch employees from using nonpublic information to either personally or assist others in profiting off prediction markets, as well as avoid losses on event contract trading. 

“All Arizona State executive branch employees are strictly prohibited from disclosing or using any nonpublic information obtained due to their public service to personally profit from, avoid loss from or assist another person or entity, in profiting or avoiding loss from participation in prediction markets,” the order said. 

“Any violation of this order may result in dismissal or other appropriate sanctions and may be referred to law enforcement. This Executive Order shall not confer any legal rights or remedies upon any person and shall not be used as a basis for legal challenges to any action or inaction of a State agency, officer, employee or agent thereof.

“Nothing in this Executive Order shall be construed to contravene any federal or State law, regulation or court order. Nothing in this Executive Order shall affect or alter the existing statutory powers of any State agency.”

It remains to be seen if Hobbs chose to sign the executive order as a means of preparing for additional prediction market activity in the state, especially following North Carolina’s decision to recognize the CFTC’s authority over event contract trading on July 8.