Neural Newscast

[00:00] Cole Mercer: From Neural Newscast, I'm Cole Mercer.
[00:03] Cole Mercer: And I'm Daniel Brooks.
[00:05] Cole Mercer: Today is Thursday, February 26, 2026.
[00:10] Cole Mercer: We begin with the resignation of Larry Summers from Harvard University.
[00:15] Cole Mercer: This comes after new documents detailed his relationship with Jeffrey Epstein.
[00:21] Cole Mercer: We also examine the first insider trading fines in the prediction market industry.
[00:27] Announcer: These developments highlight a push for accountability in elite academic circles.
[00:32] Announcer: We're also seeing it in the rapidly growing sector of online wagering platforms.
[00:37] Cole Mercer: Larry Summers is ending his 50-year tenure at Harvard.
[00:42] Cole Mercer: He is retiring from his professorship at the end of this academic year.
[00:47] Cole Mercer: the university is currently reviewing government documents and emails.
[00:52] Cole Mercer: These records detail his past communications with Jeffrey Epstein.
[00:56] Announcer: Summers announced the decision yesterday through a statement obtained by CNBC.
[01:02] Announcer: He previously took a leave of absence in November 2025.
[01:06] Announcer: That followed his resignation from the board of the artificial intelligence company OpenAI.
[01:13] Cole Mercer: The emails released by the Department of Justice and Congress indicate a friendship that lasted well into 2019.
[01:20] Cole Mercer: In one exchange, Epstein reportedly referred to himself as a wingman for the former Treasury Secretary.
[01:28] Announcer: Harvard Kennedy School Dean Jeremy Weinstein has accepted Summers' resignation from his leadership position.
[01:35] Announcer: This was at the Massavar Rahmani Center.
[01:38] Announcer: Summers will remain on leave.
[01:41] Announcer: He will not take on new students before his retirement.
[01:44] Cole Mercer: This case is part of a broader fallout affecting multiple Ivy League schools.
[01:50] Cole Mercer: Nobel Prize-winning scientist Richard Axel recently stepped down at Columbia.
[01:55] Cole Mercer: Yale professor David Galerter was barred from teaching pending a similar review.
[02:00] Announcer: The scrutiny often centers on the period between 1998 and 2008.
[02:06] Announcer: During that time, Epstein donated over $9 million to Harvard.
[02:11] Announcer: The university even appointed Epstein as a visiting fellow in the psychology department during that period.
[02:18] Cole Mercer: The university later concluded that Epstein lacked the typical academic qualifications for visiting fellows.
[02:25] Cole Mercer: They found he was unqualified to pursue the proposed course of study.
[02:29] Cole Mercer: Summers has stated he is deeply ashamed of his actions.
[02:34] Announcer: Summers has not been accused of any criminal wrongdoing.
[02:38] Announcer: However, the volume of correspondence has made his continued role at the university untenable.
[02:44] Announcer: the pressure for institutional transparency seems to be reaching beyond the campus.
[02:50] Cole Mercer: While elite institutions respond to legacy ties,
[02:54] Cole Mercer: the digital economy is attempting to regulate its future.
[02:58] Cole Mercer: New enforcement measures are coming to prediction markets.
[03:02] Announcer: The platform Kalshi has fined and suspended two users for insider trading violations.
[03:09] Announcer: This marks the first time a major U.S. prediction market has publicly disciplined traders.
[03:15] Announcer: They were cited for using non-public information to place bets.
[03:20] Cole Mercer: Artem Kaptur is a video editor for the YouTuber Mr. Beast.
[03:24] Cole Mercer: He received a $20,000 fine.
[03:27] Cole Mercer: Surveillance systems flagged statistically anomalous wins.
[03:31] Cole Mercer: Capture allegedly used material information obtained through his job to place successful bets.
[03:37] Announcer: A spokesperson for Beast Industries said the company has no tolerance for this behavior.
[03:43] Announcer: They have initiated an independent investigation.
[03:46] Announcer: Kalshi noted that their systems flagged the trades as near-perfect.
[03:51] Announcer: This alerted their enforcement team.
[03:54] Cole Mercer: Kalshi also sanctioned Kyle Langford. He ran for California governor last year.
[04:00] Cole Mercer: Langford was fined $2,000 and received a five-year suspension.
[04:04] Cole Mercer: He was wagering on the outcome of his own political race.
[04:09] Announcer: The platform stated that candidates are strictly prohibited from trading on market forecasts.
[04:14] Announcer: These cases have been reported to the U.S. Commodity Futures Trading Commission for further review.
[04:21] Cole Mercer: Bobby De Nault is the head of enforcement at Kalshi.
[04:25] Cole Mercer: He emphasized that no financial exchange is immune from that actors.
[04:29] Cole Mercer: The company has reportedly opened 200 investigations into potential rule violations over the past year.
[04:37] Announcer: Prediction markets have surged in popularity.
[04:39] Announcer: They attracted hundreds of millions of dollars in wages during the recent election cycle.
[04:44] Announcer: This growth has brought intense scrutiny from federal regulators.
[04:48] Announcer: They worry about market manipulation.
[04:51] Cole Mercer: The industry has received a warmer welcome under the current administration.
[04:55] Cole Mercer: However, these fines suggest that platforms feel pressure to prove they can police themselves
[05:00] Cole Mercer: effectively.
[05:02] Cole Mercer: This is a significant test for the sector.
[05:05] Announcer: Both the Harvard resignation and the call she finds show a rising floor for ethical standards.
[05:11] Announcer: We see consequences for using privileged access for personal gain.
[05:16] Announcer: It remains to be seen if other platforms follow this lead.
[05:20] Cole Mercer: We will continue to track the investigations into academic conduct and market integrity as more documents are unsealed.
[05:28] Cole Mercer: I'm Daniel Brooks.
[05:30] Cole Mercer: I'm Cole Mercer.
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