Wall Street Banks Tighten Employee Rules on Prediction Market Trading

Wall Street banks are tightening restrictions on employee trading in prediction markets amid concerns that workers could use nonpublic information to trade event-based contracts. According to Cointelegraph, Goldman Sachs has reportedly barred employees from trading event contracts tied to the bank, including those related to financial markets, macroeconomic events, elections, and geopolitics, citing a CNBC report that referenced people familiar with the matter. Unnamed sources at Morgan Stanley told CNBC the firm has policies governing employee prediction market trading, while a Bank of America spokesperson said the bank was in the process of issuing new prohibitive measures for employees.

The moves add to broader insider trading concerns surrounding prediction markets, which have drawn attention from the White House and US lawmakers. Proposed legislation has aimed to restrict political prediction market trading by government officials. Cointelegraph contacted Goldman Sachs to ask what prompted the preventive policies, but a spokesperson declined to comment. In May, the US Justice Department and the Commodities Futures Trading Commission (CFTC) said Google software engineer Michele Spagnuolo profited $1.2 million on Polymarket after accessing nonpublic information at work. On June 18, Wisconsin Representative Bryan Steil introduced a law to prevent certain public officials from “wagering on public policy issues and political outcomes,” though it did not mention lawmakers in the White House. A separate flashpoint was reported in January, when a soldier allegedly made more than $400,000 betting on the removal of Venezuelan President Nicolás Maduro, who was ousted and captured by US forces.

Separately, Polymarket is seeking regulatory approval to expand its offerings for US users by enabling margin trading, which would allow participants to place bets with less capital upfront. The platform filed an application to become a futures commission merchant through its affiliate, Coming Home GBA LLC, according to a July 3 filing with the National Futures Association (NFA). Polymarket would also need authorization from the CFTC to permit non-fully collateralized trading. Cointelegraph approached Polymarket for comment. The filing represents Polymarket’s latest effort to broaden its US presence as competition intensifies; its main rival has already secured approval for margin trading after its affiliate, Kinetic Markets LLC, received NFA authorization in March. Polymarket reached a record $713 million in daily taker volume on June 20, according to Dune data, more than a week after the World Cup began on June 11. Kalshi also reported a record monthly trading volume of nearly $9.4 billion in June, as the 2026 FIFA World Cup boosted activity across prediction markets.