TLDR
- Apple’s new Form 10-K bars employees and contractors from using confidential information on prediction markets.
- The ban also covers confidential details about suppliers, manufacturers, vendors, carriers, and other partners.
- Staff cannot tip inside information to others who may trade on these platforms.
- Apple also forbids staff from shorting its stock or trading put options.
- The rules arrive about three weeks after the SEC approved Cboe event contracts tied to Apple and 22 other companies.
Apple has added new limits on prediction market trading to its annual report. The rules apply to employees and contractors who come across confidential information through their work.
The policy appears in Apple’s latest Form 10-K filing with the Securities and Exchange Commission. The filing has a long section on insider trading, with one part focused only on prediction markets.
Apple is the world’s largest company by market value. Its product launches and company events are often the subject of yes or no contracts on these platforms.
What the New Policy Covers
Apple tells staff not to wager, bet, trade, buy, or sell event contracts when that activity uses Apple confidential information. This includes any information gained in connection with work at Apple.
The rule reaches past Apple itself. It also covers confidential details about other companies, including Apple suppliers, manufacturers, vendors, and customers such as cellular network carriers.
Staff are also banned from passing that information to others who may trade on these markets. Apple said confidential information includes, but is not limited to, material nonpublic information.
The filing states that the ban holds even when the activity would not count as insider trading under the law. In Apple’s words, the rule “applies whether or not the activity constitutes insider trading or securities trading under applicable laws.”
Apple also bars staff from shorting the company’s stock or trading put options. Both are ways to profit when a share price falls.
The filing does not say whether staff can still trade other types of event contracts. These include markets tied to sports, cryptocurrency, and pop culture.
Why Apple Contracts Draw Attention
Prediction market platforms list contracts on Apple events and product updates. That creates a possible way for people with inside knowledge to profit before news becomes public.
There have been cases involving workers at other large tech companies. Earlier this year, a former Google software engineer was hit with federal insider trading charges.
Prosecutors alleged the engineer used nonpublic information to make $1.2 million on Polymarket. Other large firms, including JPMorgan, have been reviewing prediction market policies for their own staff.
Politicians and regulators have also increased their scrutiny of insider trading on these platforms. Apple’s policy was published while that review continues.
The new rules come about three weeks after the SEC approved key performance indicator, or KPI, event contracts developed by Cboe Global Markets. These contracts are set to trade on Robinhood.
There could be 100 or more of these contracts, tied to a group of 23 public companies. Apple is one of the 23 companies on that list.
The contracts open the door to trading on specific Apple metrics. Those include company earnings and iPhone sales.
