Goldman Adds Prediction-Market Trades To Bank Compliance Lists

Goldman Bars Some Employee Prediction-Market Trades

Goldman Sachs has restricted employee trading on some event contracts as prediction-market activity moves from a legal edge case into bank compliance manuals.

CNBC wrote that the bank barred staff from trading on contracts tied to Goldman-specific events, elections, financial markets, macroeconomic data and geopolitics, citing people familiar with the matter.

A Goldman representative declined to discuss the policy details, but told CNBC the bank prohibits using material, nonpublic information to trade across all markets.

The restriction sits within a wider compliance response to event-contract platforms such as Kalshi and Polymarket, not inside a crypto-token listing or consumer app launch.

Survey Finds Few Explicit Company Policies

CNBC contacted 50 public and private companies whose business details appear in contracts on prediction-market platforms.

Only three had policies related to employee trading on prediction markets, while two more were actively reviewing the issue.

At United Airlines, employee guidelines prohibit using a position or company confidential information for personal gain, though the carrier does not have an explicit prediction-market policy.

JPMorgan Chase confirmed a Barron's report that employees are urged to use caution when trading on prediction markets, especially contracts tied to the financial sector.

Morgan Stanley indicated that its employee code of conduct includes prediction-market trading policies.

The scope of those policies remains outside the public record.

A person familiar with Bank of America's plans told CNBC the bank was communicating policy updates that would outline prohibited employee activity and give examples for prediction-market trading.

The specific policy changes remain outside the public record.

Google Case Gives Compliance A Legal Marker

The Goldman policy follows what CNBC described as the first event-contract insider-trading case involving a private-sector company.

CNBC cited the Commodity Futures Trading Commission and the Department of Justice as charging Google employee Michele Spagnuolo in May with using material, nonpublic information to trade on Polymarket contracts tied to Google's Year in Search lists.

The CFTC complaint cited by CNBC says Spagnuolo allegedly used the handle AlphaRaccoon and collected about $1.2 million in profit.

Legal experts quoted in the report said the number of event contracts could create more ways for confidential company information to be used in trading, including contracts tied to headcount, product-release timing or share-price levels.

Karen Woody, a law professor at Washington and Lee University, told CNBC that the breadth of questions available on prediction platforms makes it difficult to police every possible use of confidential information.

Lawyers also argued that expectations for company policies and employee education could rise as more cases are caught and prosecuted.

Platforms Add Oversight Partnerships

Prediction-market platforms have started adding their own monitoring tools.

Kalshi announced employment-verification tools for some markets in early June, partnered with StarCompliance in the same month to let employers using that software access employee event-contract trades, and partnered with Solidus Labs in February for internal market oversight.

Polymarket has partnerships with Chainalysis for on-chain market enforcement and Palantir for monitoring suspicious activity on sports-related contracts.

Tiffany Magri, a regulatory adviser at Smarsh, told CNBC that companies still benefit from explicitly naming prediction markets in employee policies rather than relying only on exchange monitoring.

The CFTC view on future company liability for employee trades based on confidential information remains outside the public record.

The survey recorded 36 nonresponses, seven declined comments, and no direct company oversight work with employers identified by Kalshi or Polymarket.