Goldman Sachs bans employees from trading speculative markets tied to elections and financials

Goldman Sachs has banned employees from trading in speculative market contracts tied to banking, elections, financial markets, macroeconomic data, and geopolitics as companies respond to the growing risks of trading inside event-based platforms.

CNBC reported that the investment bank introduced the restrictions as prediction markets face increased regulatory attention and businesses begin to review how employees use non-public information on platforms such as Polymarket and Kalshi. A spokesman for Goldman Sachs declined to comment on the policy itself but said the bank prohibits employees from using sensitive, non-public information to trade in all markets.

The report said Goldman has become one of the first major companies to introduce clear market trading restrictions, while many businesses are still deciding whether existing insider trading rules are sufficient or separate policies are needed.

Companies measure the risk of insider trading

Legal experts told CNBC that prediction markets are creating new ways for insiders to profit because contracts can cover multiple business, economic, and political events. David Oliwenstein, partner and security compliance leader at Pillsbury, said regulated companies are increasingly asking about regulatory expectations, credit risk and compliance requirements.

Karen Woody, a law professor at Washington and Lee University, told CNBC that the growing number of prediction market contracts makes it difficult for companies to monitor every possible way in which private information can be misused.

The debate intensified after US authorities brought what CNBC described as the first insider trading case involving a private equity firm and futures markets. In May, the Commodity Futures Trading Commission and the Department of Justice indicted Google employee Michele Spagnuolo for allegedly using confidential information about the company’s “Year of Search” list to trade Polymarket contracts, the CFTC says, for a profit of about $1.2 million.

CNBC found that only three of the 50 companies it contacted said they already had predictive marketing policies in place, while two others said they were reviewing the issue. JPMorgan Chase has advised employees to be careful when trading prediction markets, Morgan Stanley has confirmed that it has policies related to the employee code of conduct, and Bank of America is reviewing internal guidance for employees, according to the report.

The report also noted that Kalshi and Polymarket have introduced additional compliance tools to detect suspicious trading, although legal experts told the outlet that companies should not rely solely on trading and instead improve internal policies and employee training as the prediction markets continue to attract regulatory attention.

Prediction markets are facing increasing scrutiny

Goldman’s policy comes as futures markets face growing legal and regulatory pressure in the United States.

Earlier this month, Google updated its Chrome Web Store rules to ban browser extensions that help predict real market prices, with enforcement scheduled to begin Aug. 1. The policy change follows legal disputes involving platforms such as Kalshi and Polymarket, including ongoing challenges over contracts for sports-related events and their treatment under the country’s gambling laws.

The pressure to regulate has also reached lawmakers. In June, House Judiciary Committee Chairman Bryan Steil said Congress was working to expand the proposed ban on stock trading to include futures contracts, saying lawmakers should not trade on elections or public policy outcomes.

State governments have also taken action. In May, the CFTC sued Minnesota after the state passed a law banning speculative markets from Aug. 1, argues for a measure of conflict and state oversight of derivatives markets. The regulator said the law would criminalize work on contracts for state-regulated events, and Minnesota maintains that the state can regulate markets under its own rules.