Prediction Markets Spark Insider Trading Concerns at Banks
CNBC surveyed 50 major companies about their policies on employees trading prediction markets, and most declined to comment. Only a handful of firms, including Goldman Sachs, shared their insider trading guidelines, highlighting the industry's uncertainty around this fast-growing market.
## Prediction Markets Move Into the Mainstream
Prediction markets have surged in popularity, drawing traders who wager on the outcomes of elections, economic indicators, and major current events. Platforms such as Polymarket and Kalshi have attracted both retail investors and seasoned Wall Street professionals, blurring the line between speculative betting and traditional finance. With billions of dollars now flowing through these venues, the stakes have never been higher for compliance teams.
## Why Insider Trading Fears Are Growing
The rapid rise of prediction markets has triggered fresh concerns among regulators, lawyers, and risk officers across the financial industry. Employees at banks, asset managers, and political intelligence operations may possess nonpublic information that could inadvertently move prices on these platforms — a scenario that mirrors classic insider trading risks. The decentralized, lightly regulated nature of many prediction markets only amplifies those worries.
## CNBC Reaches Out to 50 Major Companies
To assess how the corporate world is responding, CNBC contacted 50 large financial and corporate firms, asking specifically what policies govern employee participation in prediction markets. The outreach revealed a striking pattern: most companies were unwilling to publicly discuss their internal trading rules, even as scrutiny intensifies.
## Goldman Sachs and a Few Peers Share Their Policies
A handful of firms, including Goldman Sachs, did provide details about their approach. Their answers suggest that some major players are treating prediction markets with the same seriousness as equities, derivatives, and other instruments already covered by insider trading laws. Internal restrictions, pre-clearance requirements, and outright bans appear to be among the tools being deployed to protect both the firm and its employees.
## Industrywide Silence Leaves Questions Unanswered
The vast majority of the 50 companies either declined to comment or simply did not respond. That silence has fueled speculation over whether many employers lack clear guidance for staff who increasingly encounter prediction platforms in their personal trading activity. As prediction markets continue to expand in scale and influence, pressure is building on both corporations and regulators to draw clearer lines around what employees can — and cannot — trade.
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