Securities Regulation Daily Wrap Up, ENFORCEMENT—S.D.N.Y.: Soldier’s insider trading on Maduro capture was clearly prohibited, CFTC amicus brief argues, (Aug 26, 2026)

By Lene Powell, J.D.

The CFTC said event contracts on war are “squarely contemplated” by law and regulation and it has brought insider trading actions in other contexts.

U.S. soldier Gannon Ken Van Dyke had “clear notice” that his Polymarket trades on the capture of former Venezuelan leader Nicolás Maduro were prohibited, the CFTC argued in a new amicus brief in the DOJ’s criminal action against him. The CFTC said its regulatory actions and other factors gave notice that event contracts relating to geopolitical occurrences are “swaps” under CFTC jurisdiction and are covered by an insider trading provision (Brief of Amicus Curiae U.S. CFTC in Opposition to Defendant’s Motion to Dismiss, U.S. v. Van Dyke, No. 1:26-cr-00156-MMG (S.D.N.Y. Aug. 21, 2026)).

The CFTC filed the amicus brief in the DOJ case over Van Dyke’s objection. His counsel called the brief a “breathtaking act of overstepping,” noting that the CFTC previously pushed to stay its own civil case against him.

“[T]he CFTC seeks to advance its own interests through the back door of an amicus brief instead of facing its own case against Mr. Van Dyke head on,” his counsel stated in a letter.

Alleged insider trading. In the first federal prosecution of insider trading of event contracts, Van Dyke is charged with trading Polymarket contracts on the basis of misappropriated classified information about the U.S. capture of Maduro in “Operation Absolute Resolve” in January 2026. According to the indictment, Van Dyke made more than $400,000 from the trades.

The DOJ case parallels the CFTC’s civil action against Van Dyke, which alleges similar insider trading violations.

Fair notice. The CFTC argued in its amicus brief that Van Dyke had fair notice that his trades on the Polymarket predictions market were swaps, pointing to its rulemaking and litigation that assert exclusive jurisdiction over event contracts.

Van Dyke ignored that the Commodity Exchange Act (CEA) squarely contemplates event contracts involving war, the CFTC said. The underlying events of the Maduro capture were “associated with potential financial, economic, or commercial consequences,” as shown by sharp increases in Venezuelan bonds and an increased Chevron stake in a Venezuelan joint venture following the capture.

Further, the CFTC stated that a CFTC-regulated contract market had contemporaneously offered event contracts related to the removal of Maduro. “That, if nothing else, should have been a tipoff to Van Dyke that his trades implicated the CEA.”

Van Dyke also argued that the CEA’s anti-fraud provision and CFTC’s rules are void for vagueness because neither “expressly prohibit insider trading, much less mention trading on the basis of confidential information.” But the CFTC said the anti-fraud provision mirrors the exact language of Section 10(b) of the Securities Exchange Act, long used in securities insider trading prosecutions, and the CFTC has brought insider trading actions under the corresponding CEA provision.

Van Dyke objection. Van Dyke opposed the filing of the brief, saying it was “remarkable” that the CFTC sought to file as amicus in the “supposedly separate” criminal case after being “desperate” to stay its own civil case.

“If the CFTC is so eager to decide these issues, in which it has its own interests, then it should litigate the case it brought,” counsel wrote. “It should not hide behind the criminal case, taking potshots from the hills.”

Counsel said they may ask the court to reconsider the civil stay and may use the amicus as evidence that “the CFTC is actually part of the prosecution team in this case.”

The court said it was mindful of the points raised and will accord the amicus brief its appropriate weight.

This is case No. 1:26-cr-00156-MMG.

Attorneys: Juliana Newcomb Murray, U.S. Department of Justice, for the U.S. Zach Intrater (Agnifilo Intrater LLP) for Gannon Ken Van Dyke.

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