Goldman Sachs has updated its personal trading policy to prohibit employees from participating in prediction market contracts related to finance, politics and other market-sensitive events. The move comes as financial institutions tighten compliance measures around emerging trading platforms.
According to Bloomberg, the revised policy bars employees from placing bets on contracts involving specific companies, election outcomes, financial markets, macroeconomic indicators and geopolitical developments. However, prediction market bets related to sports and entertainment remain permissible.
The investment bank has also warned employees that repeated violations of the policy could result in disciplinary action, including dismissal or closure of trading accounts. In cases where trades are found to breach the rules, Goldman may recover profits exceeding $200 or direct those gains to a charitable organisation.
The prohibited contracts include wagers on matters such as potential corporate restructurings, mergers and acquisitions involving Goldman Sachs, Bitcoin price movements and the timing of geopolitical events.
The move follows growing regulatory scrutiny of prediction markets and their potential misuse by individuals with access to confidential information. In May, US authorities charged a Google employee with allegedly using non-public information to profit from prediction market contracts linked to the company’s “Year in Search” rankings. The case has heightened concerns about insider trading risks on such platforms.
The policy also reflects a broader trend among financial firms. While JPMorgan Chase has reportedly advised employees to exercise caution when trading prediction market contracts, hedge funds such as Point72 Asset Management and Balyasny Asset Management have imposed blanket bans on employee participation.
According to reports, only a handful of major companies currently have formal policies governing employee participation in prediction markets, though several others are reviewing their compliance frameworks. The White House has also cautioned government employees against using non-public information to trade on prediction market platforms.
The revised policy underscores the growing focus on employee conduct, ethics and compliance as prediction markets gain popularity among retail and institutional participants.
