Wall Street Banks Restrict Staff Prediction Market Trades Amid Insider Concerns

Wall Street banks, including Goldman Sachs and Morgan Stanley, are tightening rules around employee trading on prediction markets as concerns about potential insider trading spread across platforms such as Polymarket and Kalshi.

The development matters because prediction markets have become a more visible part of the broader crypto-linked trading landscape, where market prices can reflect expectations about political, financial, corporate, or other real-world outcomes. For large financial institutions, employee access to sensitive information can create compliance risks when staff trade on markets tied to events they may know about before the public.

The restrictions show that major banks are treating prediction market activity as an area that may require the same kind of internal controls applied to other forms of market participation. While the source does not specify the full scope of each bank’s policy, the focus is on limiting staff activity where insider trading concerns may arise.

Polymarket and Kalshi have drawn attention as prediction market venues where users trade contracts linked to future outcomes. As these markets gain prominence, the overlap between financial professionals, privileged information, and event-based trading is attracting closer scrutiny.

The banks’ response highlights a broader compliance question for prediction markets: how platforms, users, and regulated institutions manage information advantages in markets built around forecasting real-world events.