Prof. Richard Painter Interviewed by NPR About Ethics of Profiting From War

Professor Richard Painter, S. Walter Richey Professor of Corporate Law, was interviewed by NPR about ethics rules governing White House staff, members of Congress, congressional staff, or family members who are possibly profiting off the war in Iran. Well-timed bets on when the U.S. would strike Iran have raised questions about the risk of insider trading, and whether U.S. lawmakers, their staffs, or family members could be leveraging sensitive information to financially benefit from the war with Iran or other U.S. actions through a growing market with little oversight. Last week, legislation was introduced that would ban members of Congress, the president, and vice president from buying or selling any prediction market bets — known as event contracts. While there are ethics rules that required outside earnings to be reported, currently there are no rules for how government officials can use prediction markets specifically, as financial disclosure guidance hasn’t kept up with the rise of these new markets. According to Prof. Painter, the lack of specific reporting rules limits transparency. He said, “Members of Congress certainly have to report their earnings from event contracts. But the problem is they may not have to disclose what they actually bet on ... whether it was a football game or a war.”