Points of Focus

• Goldman Sachs and Wall Street banks tighten prediction market trading rules.
• A Google insider trading case is accelerating corporate compliance reviews.
• Banks expand safeguards as prediction markets face closer scrutiny.

Wall Street banks are tightening employee trading rules for prediction markets as companies respond to insider trading risks tied to event-based contracts covering financial markets, elections, and corporate developments.

Goldman Sachs recently introduced a policy prohibiting employees from trading prediction market contracts tied to the bank, financial markets, macroeconomic data, elections, and geopolitical events, according to CNBC. Morgan Stanley, JPMorgan Chase, and Bank of America have also confirmed existing policies or updated internal guidance covering prediction market activity.

CNBC: Goldman Sachs Restricts Employee Trading on Prediction Markets Over Insider Trading Risks

According to CNBC, concerns over insider trading risks tied to prediction markets are prompting companies to update employee trading policies. Sources said Goldman Sachs has… pic.twitter.com/VaupGGtfS8

— Wu Blockchain (@WuBlockchain) July 10, 2026

Prediction market policies expand across Wall Street

The policy changes come as prediction markets expand into contracts tied to company performance, economic indicators, public policy, and other real-world events. That broader scope has created new compliance challenges for financial firms whose employees routinely handle confidential information.

Reuters reported that Goldman’s restrictions are designed to prevent both actual and perceived conflicts of interest involving the bank, its clients, and the wider financial sector. Bank of America has also updated its employee guidance with more explicit examples of prohibited trading activity, while JPMorgan said its existing insider trading rules extend to prediction markets.

The growing focus follows one of the first high-profile corporate insider trading cases involving prediction markets. In May, the US Commodity Futures Trading Commission and the Department of Justice charged Google employee Michele Spagnuolo with allegedly using confidential information related to Google’s “Year in Search” lists to generate about $1.2 million in profits through Polymarket contracts.

“A Google employee allegedly used confidential information to make more than $1.2 million through insider trading on a prediction market,” said U.S. Attorney Jay Clayton. “Corporate insiders who misuse confidential information to trade for personal gain will be prosecuted.”…

— US Attorney SDNY (@SDNYnews) May 27, 2026

Compliance moves extend beyond traditional insider trading rules

Legal specialists told CNBC that prediction markets create more opportunities for employees to trade on information that hasn’t yet reached the public because contracts now cover a wider range of corporate and macroeconomic events. That has prompted regulated companies to review whether general insider trading policies remain sufficient or whether prediction markets require dedicated guidance.

Corporate responses have varied. CNBC found that only a small number of companies contacted had explicit prediction market policies, while many others were still reviewing the issue. Some organizations argue that their existing insider trading rules already prohibit the misuse of confidential information regardless of where a trade occurs. Exchanges, including Polymarket and Kalshi, have also introduced monitoring and compliance tools, though legal experts said companies should continue strengthening internal policies and employee training rather than relying on platform-level controls alone.