H.R. 9082: Honesty and Trust in Service Act

The Honesty and Trust in Service Act is a proposed piece of legislation that seeks to regulate the use of prediction markets by certain individuals associated with the Department of Defense (DoD). This bill specifically focuses on two groups: members of the Armed Forces and civilian employees of the DoD.

Key Provisions

• Prohibition on Prediction Markets: The bill mandates that, within 180 days of its enactment, the Secretary of Defense, in consultation with the heads of the military branches, must issue regulations that prohibit the personnel of the covered Armed Forces and DoD civilians from participating in prediction markets. This applies especially when they possess or may have access to material nonpublic information that could influence market outcomes.
• Definition of Material Nonpublic Information: The legislation defines material nonpublic information as data that a reasonable investor would find significant for making investment decisions, and that is not available to the public. Essentially, this means any information that could provide an unfair advantage in trading that is not disclosed to the general populace.
• Enforcement Measures: The regulations will include specified punishments for those who violate the prohibition against using prediction markets, ensuring that there are consequences for noncompliance. The bill does not detail these punishments but mandates that they must be included in the upcoming regulations.
• Scope of Covered Armed Forces: The bill includes members from the Army, Navy, Air Force, Marine Corps, and Space Force under the prohibition.

Overall, the legislation aims to maintain integrity and trust within the military and defense sectors by restricting access to certain trading activities that could exploit unpublicized information related to national security and defense operations.

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