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Goldman, Morgan Stanley restrict staff trades on prediction markets
The move follows insider trading concerns tied to Polymarket, including a DOJ and CFTC case in which a Google engineer reportedly profited $1.2 million after using nonpublic work information.
Wall Street banks including Goldman Sachs and Morgan Stanley are tightening rules for how employees can trade on prediction market platforms as insider trading concerns spread across venues such as Polymarket and Kalshi, according to Cointelegraph.
CNBC, as cited by Cointelegraph, reports that Goldman Sachs has banned employees from trading event contracts that are specific to the bank, including contracts tied to financial markets, macroeconomic events, elections, and geopolitics. Morgan Stanley also has internal policies governing employee prediction market trading, Cointelegraph says, while a Bank of America spokesperson told CNBC that the firm is issuing new prohibitive measures.
The change is part of a broader crackdown on prediction markets. Cointelegraph notes that the White House and US lawmakers have taken an interest, with proposals aimed at restricting political prediction market trading by government officials, and that a law was introduced by Wisconsin Representative Bryan Steil on June 18 to prevent certain public officials from wagering on public policy issues and political outcomes.
Cointelegraph also points to prior regulatory actions and flashpoints that have heightened scrutiny, including a case in May where the US Justice Department and the CFTC said a Google software engineer reportedly profited $1.2 million on Polymarket after accessing nonpublic information at work. It adds that Polymarket is seeking regulatory approval to offer margin trading for US users.