He Exposed Harvard President’s Plagiarism, Then Lost Money Betting on the Story

Chris
Brunet
knew
he
had
a
big
story,
so
he
bet
it
would
make
a
big
impact.

The
independent
investigative
journalist
uncovered
now-former
Harvard
President
Claudine
Gay’s

history
of
plagiarism
in
December
2023
and
her

data
fabrication
the
year
before.
For
many
reporters,
publishing
such
explosive
exposés
would
be
its
own
reward,
but
Brunet
wanted
to
profit
from
the
fallout
of
his
findings.

Late
last
month,
he
went
to
Polymarket,
the
largest
prediction
market
platform,
and
made
a
bet.
He
stood
to
win
$1,400
worth
of
cryptocurrency
if
Gay
was
longer
be
president
of
Harvard
at
the
end
of
the
year.

Close,
but
no
cigar.
In
the
end,
Gay
didn’t
step
down
as
Harvard
President
by
the
end
of
2023,
as
the
prediction
market
asked,
but
rather

a
few
days
into
the
new
year.
While
he
had
been
directionally
correct,
Brunet
lost.

“I’ve
never
made
money
on
prediction
markets.
I’m
down.
It’s
a
hobby
rather
than
something
I
actually
make
money
on,”
Brunet
said
in
an
interview
with
CoinDesk.
“In
the
past,
when
I
wrote
articles,
I
used
to
make
firm
predictions.
But
I
got
fooled
so
many
times
with
prediction
markets,
so
I’m
very
humble.”

By
his
own
admission,
he’s
a
better
journalist
than
trader.
Even
so,
Brunet
said
he’d
still
love
to
monetize
his
otherwise
impactful
work
by
trading
on
it.

“The
only
reason
I
don’t
bet
big
on
Polymarket
right
now
is
that
I
don’t
have
a
lot
of
money.
So
I
can’t
really
justify
putting
a
huge
bankroll
in
Polymarket,”
he
told
CoinDesk.
“If
I
did
have
a
huge
bankroll,
and
there
were
markets
about
my
ongoing
investigations,
I
certainly
would
be
betting
on
that.”

If,
like
Brunet,
you’re
bold
enough
to
write
something
that
might
lead
to
an
arrest
and
federal
charges
–
he
was

first
to
name

crypto
trader
Avraham
Eisenberg
as
the

alleged
exploiter
of
Mango
Markets,

which
led
to

Eisenberg’s

arrest
in
Puerto
Rico
–
or
the
resignation
of
one
of
the
most
powerful
figures
in
academia,
why
not
enjoy
some
financial
upside?

After
all,
if
prediction
markets
are
to
become,
as
their
proponents
claim,
the
ultimate
arbiters
of
truth
because
they
harness
the
power
of
the
crowd,
giving
people
a
chance
to
put
their
money
where
their
mouths
are,
they
will
need
somewhere
to
start.

There’s

also
an
argument
that
prediction
market
journalism
isn’t
all
that
different
from
what
activist
short
sellers
do:
use
a
process
similar
to
investigative
journalism
to
find
dirt
on
a
company,
take
a
short
position
and
then
publish
the
results
for
the
market
to
digest.

A
future,
prediction
market-oriented
media
could
even,

as
Scott
Alexander
of
Slate
Star
Codex
fame
writes,
do
away
with
the
industry
cancer
of
fake
news
and
clickbait.

“In
a
prediction
market,
once
you’re
wrong
a
couple
of
times,
traders
will
stop
updating
on
your
reports
and
you’ll
lose
most
of
your
power
to
move
the
market,”
he
wrote.

Yet,
lingering
on
Brunet’s
mind
is
whether
this
is
all
ethical.

“One
big
question
I
have,
still
somewhat
unresolved,
is
the
ethics
of
having
a
personal
stake
in
the
outcome
of
your
story,
akin
to
insider
trading,
or
knowing
information
before
the
markets
do,”
he
said.

Can
you
place
a
prediction
market
bet
on
something
you’re
so
closely
invested
in?
Could
Gay,
or
the
Harvard
Corporation
board,
hypothetically
trade
on
Polymarket
a
day
before
she
resigned?

“It
strikes
me
that
betting
on
the
outcome
of
one’s
stories
presents
a
conflict
of
interest.
The
journalist
now
has
a
stake
beyond
informing
the
public
or
serving
the
public
interest,”
Jane
E.
Kirtley,
a
professor
of
media
ethics
and
law
at
the
University
of
Minnesota’s
Hubbard
School
of
Journalism,
told
CoinDesk
in
an
email
interview.

Kirtley
says
she
finds
it
troubling
because
it
“undermines
the
compact
that
journalists
have
with
the
public:
acting
independently
and
putting
the
interests
of
the
public
first
and
foremost.”

Kirtley
brings
up
the
1980s-era
case
of
Foster
Winans,
a
former
Wall
Street
Journal
reporter
who
leaked
the
contents
of
upcoming,
potentially
market-moving
“Heard
on
the
Street”

columns
to
a
stockbroker.

“I
think
from
an
ethical
perspective,
it
is
difficult
to
argue
that
Winans’
conduct
was
consistent
with
ethical
norms
in
journalism,”
she
said.
“He
had
a
personal
financial
interest
in
the
impact
of
the
‘Heard
on
the
Street’
columns
he
wrote,
and
he
did
not
disclose
that
to
his
readers
or
his
employer.”

At
a
minimum,
Kirtley
said,
journalists
who
bet
on
the
outcome
of
their
stories
“should
be
transparent
about
it
—
certainly
with
the
journalist’s
employer
(if
any),
and
also
with
the
public.”

For
his
part,
Brunet
is
quite
clear
with
his
readers
about
exactly
what
he’s
doing.
“I
don’t
believe
‘unbiased
journalism’
exists,
hence
why
the
tagline
of
my
Substack
is
”opinionated
investigative
journalism,'”

he
posted
on
X
in
December,
while
disclosing
exactly
how
much
he’d
profit
should
Gay
have
been
fired
before
the
end
of
2023.

“I
wear
my
bias
on
my
sleeve,”
he
continued.

And
how
about
the
legality?
That’s
where
it
gets
complicated.

Winans,
in
the
eyes
of
the
court,
had
breached
the
duty
of
confidentiality
he
owed
the
WSJ
by
front-running
its
daily
publication
schedule,
finding
him
and
his
co-conspirators
guilty
of
mail
and
wire
fraud.

The
information
was
still
confidential
until
it
was
published,
the
court
found.

(This
did
raise
significant

First
Amendment
concerns
at
the
time,
and
the
Reporters
Committee
for
Freedom
of
the
Press,
where
Kirtley
was
a
director,
was
part
of
an
amicus
brief
arguing
these
issues).

For
prediction
markets,
things
are
more
murky.

“There
is
no
clear
answer
as
to
whether
betting
on
prediction
markets
with
inside
information
constitutes
insider
trading
under
U.S.
law,”
Florida-based
digital
assets
attorney
John
Montague
told
CoinDesk
in
an
interview.

“It
may
depend
on
whether
prediction
markets
are
considered
‘securities’
for
the
purposes
of
insider
trading
law,
and
whether
the
person
betting
on
the
prediction
market
is
in
possession
of
material,
nonpublic
information
and
is
using
it
for
personal
benefit,”
Montague
continued.

Montague
said
the
current
statute
on
the
books
(15
U.S.C.
§
78u-1)
imposes
civil
penalties
for
insider
trading
involving
securities.

But
it’s
unclear
if
prediction
markets
are
classified
as
securities
under
this
law,
Montague
says,
and
thus
under
the
purview
of
the
U.S.
Securities
and
Exchange
Commission
(which
has
signaled
it
deems
most
crypto
assets
to
be
securities).
If
so,
using
insider
information
in
prediction
markets
could
constitute
insider
trading.

“I
could
foresee
a
situation
in
which
the
SEC
establishes
such
marketplaces
as
unregistered
securities
and
thus
expands
the
SEC’s
jurisdiction
to
prediction
markets
at
which
such
time
some
of
the
insider
trading
penalties
could
be
available,”
he
said.

For
its
part,
Polymarket,
which

runs
on
the
Polygon
blockchain
network
and
settles
bets
in
crypto,
prohibits
U.S.
persons
from
using
the
platform
and
isn’t
available
in
the
country.

On
Kalshi,
which
is
registered
with
the
U.S.
Commodity
Futures
Trading
Commission
and
settles
in
dollars,
there
is
a
prohibition
to
trade
on
material
nonpublic
information.

“There
is
currently
no
specific
instance
that
I
am
aware
of
where
the
Commodity
Futures
Trading
Commission
has
exerted
its
authority
over
insider
trading
specifically
related
to
prediction
markets.
It
is
certainly
a
possibility
that
the
CFTC
could
choose
to
do
so
in
the
future,”
Montague
added.

“Although
no
precedent
exists
yet,
it
is
highly
likely
that
prediction
markets
could
fall
within
the
CFTC’s
jurisdiction,
giving
it
the
potential
to
regulate
such
activities
under
its
mandate
to
combat
fraud
and
manipulation,”
he
continued.

Kalshi

also
prohibits
employees
of
data
providers
(ranging
from
the
National
Weather
Service
to
Billboard
magazine),
which
may
have
a
slight
lead
on
getting
data
before
it
becomes
public,
from
trading.

It
should
also
be
noted
that
the
CFTC
only
got
powers
in
2010
to
pursue
insider
trading
cases
under
the
Dodd-Frank
Act,
which
was
meant
to
limit
financial
risk.

Prior
to
the
act,
the
CFTC’s
authority
to
regulate
insider
trading
in
commodities
markets
was
limited,
focusing
mainly
on
its
own
personnel
and
those
of
exchanges,
but
Dodd-Frank
expanded
the
regulator’s
powers,
allowing
it
to
address
a
broader
range
of
insider
trading
activities,
including
those
involving
use
of
confidential
information.

Despite
not
making
money
so
far
with
prediction
markets,
Brunet
said
he
is
still
a
believer
in
the
idea
of
monetizing
the
wisdom
of
the
crowd
–
the
most
accurate
gauge
of
truth,
according
to
proponents
of
prediction
markets
–
and
that
it’s
still
early
for
the
industry.

Losing
bet
aside,
Brunet
said
his
investigation
into
Gay
has
done
wonders
for
his
subscriber
count
–
much
more
than
his
investigation
into
Mango
Markets’
alleged
exploiter.

“I
got
300
subscribers
from
the
Mango
Markets
story,”
he
said.
“And
in
comparison,
for
the
Harvard
story,
I
went
from
5,700
to
8,500.”

Brunet
said
he’s
become
“somewhat
pigeonholed”
after
his
success
in
reporting
on
academia.

“I
almost
wish
I
could
return
to
writing
about
other
topics.
However,
I
receive
many
tips
about
academia,
and
my
audience,
which
is
largely
academic,
seems
very
interested
in
this
area,”
he
continued.

When
he
eventually
branches
out,
Brunet
said,
he
plans
to
launch
a
Substack
newsletter
covering
central
bank
digital
currencies.

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“We’re
not
approaching
it
from
a
right-wing
conspiracy
perspective,
but
rather
from
a
standpoint
advocating
the
ethos
of
decentralization,
which
contrasts
with
CBDCs,”
he
said.
“We
are
highly
critical
of
CBDCs,
and
there
aren’t
many
publications
specifically
opposing
them.”