A supporter checks the gambling site Karshi just before state Rep. Alex Boaz (D-NY) addresses supporters at a watch party at the Freehand Hotel after conceding the congressional race to Mika Lasher, who will replace U.S. Rep. Jerry Nadler (D-NY) in New York City’s 12th District, June 23, 2026, in New York City.
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Insider trading has become a new risk in the new world of prediction markets, and some companies, including Goldman Sachs, have taken steps to restrict employee trading on their platforms.
Goldman Sachs has prohibited employees from trading on contracts related to bank-specific events, as well as elections, financial markets, macroeconomic data and geopolitics, the people said.
A representative for Goldman declined to comment on the policy, but said the bank prohibits the use of material nonpublic information in trading in all markets.
While some companies have begun developing policies to manage insider trading risks in prediction markets, many others have yet to take the first step, legal experts say.
“We’re constantly being asked questions by our clients, especially those in regulated companies, about what the expectations of regulators are, what the risks are, and what the potential liability is,” said David Oriwenstein, a partner and head of Pillsbury’s securities enforcement practice.
Polymarket website on a smartphone on Tuesday, July 22, 2025 in Germantown, New York, USA.
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News of an explicit prediction market trading mandate at Goldman comes after the first event contract insider trading incident involving a private company.
In May, the Commodity Futures Trading Commission and the Department of Justice charged Google employee Michele Spagnuolo with using material non-public information in trading Polymarket contracts related to the browser’s “search year” list. According to the CFTC’s complaint, Spagnuolo collected approximately $1.2 million in profits using the handle “AlphaRaccoon.”
Legal experts said the sheer number of contracts available on predictive platforms could provide new ways to exploit material non-public information for profit. For example, Google employees can use internal data to trade contracts on things like how many employees the company has this year, when a new version of the Gemini AI tool will be released, or where Alphabet’s stock price will end at the end of the month.
An advertisement for Polymarket at a subway station in New York, USA, on Thursday, February 5, 2026.
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“Being able to bet on all these different questions makes it very difficult for people to kind of play whack-a-mole in terms of where the information that they secretly obtained is being used,” said Karen Woody, a law professor at Washington and Lee University.
Lawyers told CNBC that as more cases of insider trading on these platforms are uncovered and prosecuted, there will be greater expectations that companies have adequate policies and education to avoid potential liability in lawsuits involving their employees.
However, lawyers also said they are advising their clients that it is not too late and that companies should use this opportunity now to develop the necessary policies.
Company position
CNBC reached out to 50 public and private companies, all of which have signed agreements to detail their operations on the prediction market platform.
In total, only three companies disclosed that they had a policy regarding trading in prediction markets, and two others said they were actively considering it.
United Airlines told CNBC that while it does not have a clear policy regarding prediction market trading, its guidelines for employees “prohibit using their position (or confidential trade information obtained from their position) for personal gain.”
A JPMorgan Chase spokesperson confirmed Barron’s report that employees are asked to proceed with caution when trading in prediction markets, particularly contracts related to the financial sector.
A Morgan Stanley spokeswoman said the bank has a policy on trading in prediction markets in its employee code of conduct, but declined to provide further details.
Exterior view of the Bank of America branch in Hanover, Maryland, on March 30, 2026.
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A person familiar with Bank of America’s plans told CNBC that the bank is in the process of communicating an update to its employees on a policy that outlines prohibited conduct and provides examples to clarify expectations for trading on prediction market platforms. The official did not provide details on specific changes to the policy itself.
Banks appear to be the sector most likely to say they are developing or have already implemented a prediction market trading policy.
“Financial institutions have large compliance departments,” said Lara Shortz, a partner in the labor and employment practice at Michaelman & Robinson. “They spend a lot of time putting together policies around trade and the use of information.”
Overall, 36 companies, including those in non-banking sectors, did not respond to CNBC’s inquiries about their prediction market trading policies for employees. Seven others declined to comment for this story.
CNBC cannot conclude exactly what the non-responding companies are doing, but echoes statements from lawyers who work with companies on internal policy issues. While only a few companies have made major policy changes so far, many others are in the early stages of making some form of update amid the new explosion of platforms.
“Right now, just because training is new doesn’t necessarily mean it’s the gold standard,” said Marissa Mastroianni, an employment law attorney at Cole Schotz.
What’s already in the book
Traders work on the floor of the New York Stock Exchange during morning trading on June 26, 2026 in New York City.
Michael M. Santiago | Getty Images
Some legal experts and company representatives argued that the broad directive prohibiting insider trading essentially applied to prediction markets. A person familiar with OpenAI’s employee policies said the company’s comprehensive insider trading policy makes clear that employees cannot use material non-public information in any way.
But Tiffany Magri, a regulatory advisor at compliance technology firm Smash, said companies could benefit from explicitly mentioning prediction markets in their policies.
“The question is no longer whether exchanges can detect suspicious transactions,” he said. “The question is whether employers have set clear expectations about when employees should be prohibited from participating in markets related to information they encounter on the job.”
Major prediction market platforms Calci and Polymarket have taken their own steps to crack down on insider trading, Magri noted.
In early June, Kalsi announced a new employment verification tool for some prediction market participants. That same month, the company partnered with StarCompliance to give employers using the partner’s software access to employee event contract transactions. To strengthen its own internal oversight, the exchange partnered with market integrity firm Solidus Labs in February.
An advertisement for Karshi is placed on a subway train in Washington, DC, USA on Wednesday, June 17, 2026.
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Polymarket highlighted its partnership in a statement to CNBC. These include a partnership with on-chain market enforcement firm Chainaries and a partnership with Palantir, which monitors suspicious activity in sports-related contracts.
But Magri pointed out that these are just the first steps and that companies should start training their employees on the platforms rather than relying on the exchanges themselves to prevent insider trading.
Both Calci and Polymarket declined to comment on whether they work directly with companies to develop internal oversight and enforcement mechanisms.
Early days, growing urgency
Companies and the CFTC are entering new territory when faced with insider information about prediction markets.
On the prosecutor’s side, Woody said the CFTC has a “blank canvas” on what to do about insider trading. “I think what’s interesting about the CFTC taking the lead here is that there haven’t been many cases in this area before. This is fairly new,” she said.
The CFTC did not respond to a request for comment from CNBC about whether it expects companies to be held liable for employee insider trading in the future if they are deemed to have failed to adequately educate their employees about insider trading.
John Sullivan, a business professor at San Francisco State University, said that while regulatory uncertainty remains, companies should take the lead in creating rules and learn how prediction markets work.
Top view of staff working in a busy open plan office
Monkey Business Images | iStock | Getty Images
Attorneys at King & Spalding LLP outlined steps companies can take regarding the Law360 article. These include updating your insider trading policy to include event contracts and establishing protocols to monitor unusual activity in individual markets related to your business.
For even tougher measures, Sullivan told CNBC, companies should consider banning the platform on company-owned devices and barring employees from trading during work hours.
He said it would be foolish to ignore the relevance of prediction markets. “It’s embarrassing to say you haven’t done anything or don’t know anything.”
—CNBC’s Ashley Capoot contributed reporting
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
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