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Goldman Sachs has restricted employees from trading contracts on prediction markets over insider-trading concerns, according to a CNBC report. The bank has prohibited staff from trading contracts related to Goldman itself, elections, financial markets, macroeconomic data, and geopolitics. Morgan Stanley already maintains similar restrictions, while Bank of America is reportedly updating its guidelines.
The policy push comes after US regulators in May charged a Google employee with using nonpublic information to profit roughly $1.2 million on Polymarket contracts, a case that put prediction markets squarely on Wall Street compliance radars. For banks with material nonpublic flow across virtually every market category, prediction-market contracts are a structural conflict: the same employee who sees order flow, M&A dialogue, or Fed pre-reads can also place a yes/no bet on the outcome.
Why it matters
Prediction markets sit in a regulatory gray zone. The CFTC oversees the contracts themselves, but how financial firms handle employee exposure on these venues is a conduct and reputational question, not a licensing one. Banks are choosing to tighten the perimeter preemptively, before the next insider-trading case forces the issue.
Market impact
For Polymarket and Kalshi, the effect is concentration in retail and crypto-native flow, with Wall Street employees effectively priced out of the venue during their tenure. For the wider prediction-market category, expect copycat restrictions at every major US bank, and growing pressure on regulated broker-dealers that clear or finance employee activity on these platforms.
Frequently asked questions
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What exactly did Goldman Sachs ban employees from trading?
Per CNBC, Goldman prohibited employees from trading prediction-market contracts tied to the bank itself, elections, financial markets, macroeconomic data, and geopolitics.
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Why are banks restricting prediction-market access now?
Concerns that employees with access to nonpublic information could profit by trading related contracts. The May charges against a Google employee over Polymarket trades sharpened those concerns across Wall Street.
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Do other major banks have similar policies?
Morgan Stanley already maintains comparable restrictions, and Bank of America is reportedly updating its guidelines to cover prediction-market exposure.
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Which prediction-market platform is most affected?
Polymarket is the named example, after the Google employee's case. Kalshi and any other venue serving Wall Street staff face the same flow impact as banks restrict access.
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Is prediction-market trading on Polymarket legal?
The contracts themselves fall under CFTC oversight, but employer conduct rules are separate. Banks are tightening internal policies regardless of venue legality to manage insider-trading risk.
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