Goldman Sachs Expands Ban on Employees’ Use of Prediction Markets Covering Finance and Politics

Goldman Sachs has updated its personal trading rules to forbid staff from engaging in prediction market contracts that relate to finance, politics and other market‑sensitive topics. This adjustment reflects the firm’s effort to strengthen compliance oversight over emerging trading platforms.

In line with Bloomberg, the revised policy prohibits employees from wagering on contracts that involve particular corporations, election results, financial markets, macroeconomic metrics and geopolitical events. Prediction market bets centered on sports and entertainment, however, remain allowed.

The bank has also cautioned that repeated breaches may trigger disciplinary measures ranging from formal reprimands to termination, and may result in the recovery of illicit gains exceeding $200 or the donation of such proceeds to charity.

Contracts that fall under the restriction include stakes on potential corporate restructurings, mergers or acquisitions involving Goldman Sachs, fluctuations in Bitcoin prices and the timing of geopolitical developments.

The policy follows heightened regulatory examination of prediction markets and their risk of being exploited by individuals privy to confidential information. In May, U.S. authorities charged a Google employee with allegedly leveraging non‑public data to profit from prediction market contracts tied to the company’s “Year in Search” rankings, prompting heightened concerns about insider‑trading exposure on such platforms.

The new framework also mirrors a broader industry pattern. While JPMorgan Chase has advised staff to exercise prudence when trading prediction market contracts, hedge funds such as Point72 Asset Management and Balyasny Asset Management have instituted outright bans on employee participation.

Industry reports indicate that only a limited number of major firms maintain explicit policies governing employee conduct in prediction markets, though several others are reviewing their compliance frameworks. The White House has likewise warned government personnel against using non‑public information to trade on prediction market platforms.

This revised policy underscores the growing emphasis on employee conduct, ethics and compliance as prediction markets attract increasing interest from both retail and institutional participants.

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