CNBC: Goldman Sachs Restricts Employee Trading on Prediction Markets Amid Insider Trading Concerns

Major U.S. banks are tightening restrictions on employee participation in prediction markets as concerns over potential insider trading prompt firms to strengthen compliance policies, CNBC reported.

Specifically, Goldman Sachs has banned employees from trading prediction market contracts tied to the bank, financial markets, elections, macroeconomic data, and geopolitical events, according to the report. Morgan Stanley already has comparable restrictions in place, while Bank of America is updating its internal guidelines.

The tighter controls follow a recent enforcement action by U.S. regulators. In May, authorities charged a Google employee with allegedly using nonpublic information to earn about $1.2 million from trades on Polymarket, highlighting growing regulatory scrutiny of prediction markets and their potential misuse by insiders.

Source: CNBC