Goldman Sachs has updated its employee code of conduct to prohibit staff from trading on prediction‑market contracts covering bank‑specific events, elections, financial markets, macroeconomic data and geopolitics.
Goldman Sachs has updated its employee code of conduct to prohibit staff from trading on prediction‑market contracts covering bank‑specific events, elections, financial markets, macroeconomic data and geopolitics. The policy was disclosed in a memo circulated to employees in early July 2026.
Goldman Sachs announced a restriction on employee use of prediction‑market platforms on July 9, 2026, with the policy becoming effective immediately for all staff worldwide [1]. The ban covers contracts that reference events directly related to the firm, as well as broader categories such as political elections, financial market movements, macroeconomic indicators and geopolitical developments [1]. The announcement was made through an internal memorandum that amended the firm’s existing code of conduct, citing concerns over potential insider‑trading risks and the need to preserve market integrity [2].
The memo was addressed to all Goldman Sachs employees, including traders, analysts, and support staff operating in the firm’s global offices [2]. It was issued concurrently with a similar amendment at Morgan Stanley, which also added prediction‑market restrictions to its employee conduct guidelines [3]. Both firms cited the rapid growth of online prediction platforms and the associated regulatory scrutiny as drivers for the policy change [1].
Policy Scope and Enforcement Mechanisms
The updated code explicitly forbids participation in any event‑based contracts that could be linked to confidential or material non‑public information held by Goldman Sachs employees [2]. The prohibition extends to all external prediction‑market services, including well‑known platforms such as PredictIt and Kalshi [1]. Employees who violate the policy may face disciplinary action up to and including termination, as outlined in the memo’s enforcement clause [2].
Implementation of the ban involves monitoring tools integrated with the firm’s compliance infrastructure. Goldman Sachs’ compliance department will receive automated alerts when an employee attempts to access or place a trade on a restricted platform, and the firm will conduct periodic audits to ensure adherence [4]. The policy also requires staff to certify annually that they have not engaged in prohibited prediction‑market activity, reinforcing the firm’s broader risk‑management framework [2].
The policy also requires staff to certify annually that they have not engaged in prohibited prediction‑market activity, reinforcing the firm’s broader risk‑management framework [2].
Industry Context and Comparable Actions
Goldman Sachs Bans Employee Participation in Prediction Market Contracts
Goldman Sachs’ decision follows a broader trend among major Wall Street institutions to limit employee interaction with prediction markets. Morgan Stanley, for example, revised its employee handbook in early July 2026 to include similar prohibitions, citing “potential conflicts of interest and insider‑trading exposure” [3]. The moves come after regulators have highlighted prediction markets as a nascent source of insider‑trading risk, prompting several financial firms to reassess internal policies [1].
The New York Times reported that the policy shift reflects heightened scrutiny from the U.S. Securities and Exchange Commission, which has issued advisory letters warning firms about the legal implications of employee participation in market‑based betting platforms [2]. At the same time, industry analysts note that prediction markets have become increasingly popular for forecasting economic indicators, political outcomes and commodity prices, raising the stakes for compliance departments [4].
public universities are encountering a tight labor market in 2026, driven by AI adoption, low-hire/low-fire dynamics, demographic shifts, and fiscal pressures.
Impact on Employees, Educators and the Financial Community
For Goldman Sachs staff, the immediate effect is a clear prohibition on using prediction‑market services for any personal or professional speculation, limiting a previously informal avenue for market insight [1]. Employees who previously leveraged such platforms for informal risk assessment must now rely exclusively on internal research tools and publicly available data [2].
The policy also informs curricula in finance and ethics programs at universities, where case studies on insider‑trading compliance now incorporate prediction‑market considerations [3]. Educators can reference the Goldman Sachs memo as a real‑world example of how firms translate regulatory concerns into employee conduct rules [4]. Additionally, the restriction may influence the broader adoption of prediction markets within the financial industry, as firms weigh the benefits of crowd‑sourced forecasting against compliance costs [1].
Overall, the ban underscores a shift toward stricter internal controls over emerging digital trading venues, reinforcing the importance of adherence to insider‑trading laws for both practitioners and students of finance [2].
Key Facts
Overall, the ban underscores a shift toward stricter internal controls over emerging digital trading venues, reinforcing the importance of adherence to insider‑trading laws for both practitioners and students of finance [2].
What: Goldman Sachs prohibits employees from trading on prediction‑market contracts covering bank‑specific events, elections, financial markets, macroeconomic data and geopolitics.
When: Policy announced July 9, 2026, effective immediately.
Impact: Employees must cease all prediction‑market activity; the move signals heightened compliance focus for the financial sector and provides a concrete case for finance education.
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