Goldman Sachs has updated its personal trading policy to prohibit employees from participating in prediction market contracts. The revised rules specifically bar staff from placing bets on event contracts tied to individual companies, electoral outcomes, financial market performance, macroeconomic data, and geopolitical events, according to Bloomberg. Employees are still permitted to engage in sports and entertainment-related wagers under the updated guidelines. Violation of these restrictions may result in disciplinary action, including termination or account deactivation, with the bank reserving the right to reclaim profits exceeding $200 or redirect such amounts to charity if a trade is found to violate policy requirements.
The policy explicitly prohibits betting on outcomes such as Goldman Sachs undergoing restructuring or pursuing acquisitions within specific timeframes, ceasefire agreements in active conflicts, cryptocurrency prices like Bitcoin, or the regulatory approval of pending mergers. In contrast, JPMorgan Chase has adopted a more lenient stance, advising employees to exercise caution when trading financial-sector contracts without imposing an outright ban. Meanwhile, hedge funds Point72 Asset Management and Balyasny Asset Management have implemented stricter measures, banning all personal prediction market activity for their employees.
This decision follows the first-ever insider-trading case involving a private sector company in the prediction market space. In May, federal regulators from the CFTC and DOJ charged Google employee Michele Spagnuolo, who allegedly used nonpublic information to place profitable bets on Polymarket contracts related to Google’s “Year in Search” rankings. The CFTC reported that Spagnuolo, operating under the username “AlphaRaccoon,” earned approximately $1.2 million through these trades.
The move highlights broader industry challenges in regulating prediction market participation. A survey of 50 firms revealed that only three had established formal policies on the matter, with two others considering such measures. Morgan Stanley includes relevant guidelines in its employee code of conduct, while Bank of America is reportedly rolling out internal communications about new restrictions on employee trading. Notably, Goldman Sachs CEO David Solomon previously described prediction markets as “super interesting” and acknowledged meeting with leading platforms in the sector as recently as January.
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