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Title: OpenAI Fires an Employee For Prediction Market Insider Trading

Link: https://slashdot.org/story/26/02/27/2342226/o...

An anonymous reader quotes a report from Wired: OpenAI has fired an employee
following an investigation into their activity on prediction market platforms
including Polymarket, WIRED has learned. OpenAI CEO of Applications, Fidji
Simo, disclosed the termination in an internal message to employees earlier
this year. The employee, she said, "used confidential OpenAI information in
connection with external prediction markets (e.g. Polymarket)." "Our policies
prohibit employees from using confidential OpenAI information for personal
gain, including in prediction markets," says spokesperson Kayla Wood. OpenAI
has not revealed the name of the employee or the specifics of their trades.
Evidence suggests that this was not an isolated event. Polymarket runs on the
Polygon blockchain network, so its trading ledger is pseudonymous but
traceable. According to an analysis by the financial data platform Unusual
Whales, there have been clusters of activities, which the service flagged as
suspicious, around OpenAI-themed events since March 2023. Unusual Whales
flagged 77 positions in 60 wallet addresses as suspected insider trades,
looking at the age of the account, trading history, and significance of
investment, among other factors. Suspicious trades hinged on the release
dates of products like Sora, GPT-5, and the ChatGPT Browser, as well as CEO
Sam Altman's employment status. In November 2023, two days after Altman was
dramatically ousted from the company, a new wallet placed a significant bet
that he would return, netting over $16,000 in profits. The account never
placed another bet. The behavior fits into patterns typical of insider
trades. "The tell is the clustering. In the 40 hours before OpenAI launched
its browser, 13 brand-new wallets with zero trading history appeared on the
site for the first time to collectively bet $309,486 on the right outcome,"
says Unusual Whales CEO Matt Saincome. "When you see that many fresh wallets
making the same bet at the same time, it raises a real question about whether
the secret is getting out." [...] Though this is the first confirmed case of
a large technology company firing an employee over trades in prediction
markets, it's almost certainly not the last. Opportunities for tech sector
employees to make trades on markets abound. "The data tells me this is
happening all over the place," Saincome says.

Read more of this story at Slashdot.

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