Goldman Sachs just told its bankers: no betting on your own stock, no betting on financial markets, no betting on ceasefires. The bank quietly rewrote its personal trading policy this week, banning employees from wagering on event contracts tied to specific companies, election outcomes, bitcoin’s price or merger approvals, Bloomberg reported Thursday. Break the rule repeatedly and you’re fired; win improperly and Goldman claws back anything over $200 to charity.
The trigger isn’t hard to find. In May, the CFTC and DOJ charged a Google engineer, Michele Spagnuolo, with turning inside knowledge of the company’s “Year in Search” list into $1.2 million on Polymarket, wagering on 23 contracts with what the government called near-perfect accuracy. That’s the first case of an employee front-running his own employer’s data on a prediction market. Every compliance department in finance took notice.
JPMorgan sent a softer memo asking staff to “think carefully.” Point72 and Balyasny banned it outright. New York and Illinois moved first, with Governor Hochul signing Executive Order 60 in April barring state employees from betting on inside information, framing it plainly: “Getting rich by betting on inside information is corruption, plain and simple.”
Congress is the real test. The Stop Lawmakers From Predicting Act, introduced by Rep. Bryan Steil in June, would bar members and their families from profiting on prediction market bets built on information they got from the job. If it dies in committee, expect every bank’s internal policy to end up more binding than the law governing the people who wrote it.
Bernstein pegs prediction market volume at $1 trillion by 2030. The compliance departments are already ahead of the regulators.
— Marcus Webb