Wall Street Banks Restrict Staff Prediction Market Trades
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- Goldman Sachs has banned employees from trading event contracts tied to the bank — financial markets, macroeconomic events, elections and geopolitics — on prediction platforms, CNBC reported citing people familiar with the matter.
- Morgan Stanley has policies governing employee prediction market trades, while Bank of America is rolling out new prohibitive measures for its staff, according to the same report.
- The US Department of Justice and CFTC said in May that Google software engineer Michele Spagnuolo profited $1.2 million on Polymarket by exploiting nonpublic information accessed at work.
- In January, a US soldier allegedly made more than $400,000 on Polymarket betting on the removal of Venezuelan President Nicolás Maduro, who was later ousted by US forces.
- On June 18, Wisconsin Rep. Bryan Steil introduced a bill to bar public officials from wagering on public policy issues and political outcomes on prediction markets.
- Polymarket filed through affiliate Coming Home GBA LLC on July 3 to register as a futures commission merchant with the NFA, seeking to offer US users margin trading on event contracts; rival Kalshi's affiliate Kinetic Markets LLC received NFA authorization in March.
- Polymarket posted a record $713 million in daily taker volume on June 20, while Kalshi logged a record monthly trading volume of nearly $9.4 billion in June, fueled partly by the FIFA World Cup.
Why it matters: With the DOJ and CFTC already prosecuting a $1.2 million Polymarket insider case and a US soldier charged over a $400,000 Maduro-related bet, Wall Street's biggest banks are now pre-emptively barring staff from event-contract trading — a move that lands just as Polymarket files for NFA registration to bring margin trading to US users, tightening the squeeze between platform expansion and compliance risk.
