July 9 – Several major Wall Street banks have updated their employee conduct policies to address the growing popularity of prediction markets, introducing restrictions on betting involving financial and political events to help prevent conflicts of interest.
According to sources familiar with the matter, institutions including Goldman Sachs, Morgan Stanley, JPMorgan Chase, and Bank of America have incorporated new or expanded guidelines governing employee participation in event-based prediction contracts.
Goldman Sachs recently informed employees that they are prohibited from trading prediction-market contracts tied to financial markets or political events if those activities could create actual or perceived conflicts involving the bank, its clients, or the broader financial industry.
Prediction markets allow users to buy and sell contracts based on the likelihood of future events, ranging from elections and economic developments to sports and weather outcomes. Platforms such as Kalshi and Polymarket have experienced rapid growth in recent years, drawing increased attention from regulators as participation expands.
According to reports, repeated violations of Goldman Sachs’ policy could lead to disciplinary action, including termination of employment, while employees may also be required to surrender profits earned from prohibited trades. The restrictions do not extend to prediction-market contracts involving sports or entertainment events.
Morgan Stanley has also included provisions covering prediction-market activity within its employee code of conduct, although the bank has not publicly disclosed the specific details of those rules.
JPMorgan Chase applies similar restrictions through its existing insider trading policies, prohibiting employees from using confidential, non-public information in any form of trading, including prediction-market betting.
Meanwhile, Bank of America has strengthened its guidelines by explicitly restricting employees from participating in certain prediction-market contracts related to individual companies, macroeconomic developments, and financial services events. A spokesperson for the bank confirmed that its employee policy was recently updated to provide clearer examples of prohibited activities.
The policy changes reflect increasing scrutiny of prediction markets as financial institutions seek to manage compliance risks while the sector continues to expand.
