OpenAI Fires an Employee For Prediction Market Insider Trading

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.

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