Key facts
- Wall Street banks are restricting employee trading on prediction market platforms.
- Goldman Sachs has banned employees from trading on event contracts specific to the bank.
- Morgan Stanley has policies regarding employee prediction market trading.
- Bank of America is implementing new prohibitive measures for employees.
- Concerns over insider trading on prediction markets have intensified.
- A Google employee allegedly profited $1.2 million on Polymarket using nonpublic information.
Wall Street banks are implementing stricter rules for their employees regarding trading on prediction market platforms, driven by escalating concerns about insider trading. Goldman Sachs has reportedly prohibited its staff from trading on event contracts related to the bank, financial markets, macroeconomic events, elections, and geopolitics. Morgan Stanley confirmed it has existing policies in place, while Bank of America is in the process of issuing new prohibitive measures. These actions follow a high-profile case where a Google employee allegedly made $1.2 million on Polymarket by leveraging nonpublic information obtained at work. The US Justice Department and the Commodities Futures Trading Commission (CFTC) have been scrutinizing prediction markets, with lawmakers also proposing legislation to prevent public officials from trading on political outcomes. Meanwhile, Polymarket is actively seeking US regulatory approval to offer margin trading, having filed an application to become a futures commission merchant. The platform, along with rival Kalshi, has seen significant trading volume increases, partly attributed to major events like the FIFA World Cup.