A supporter checks the gambling site ‘Kalshi” just before State Assembly member, Alex Bores (D-NY) gives a speech to supporters at his watch party at The Freehand Hotel after conceding the congressional race to Micah Lasher who will replace Rep Jerry Nadler (D-NY) in NY’s 12th Congressional District on June 23, 2026 in New York City. Laura Brett | Getty ImagesInsider trading is an emerging risk in the new world of prediction markets, and some companies – including Goldman Sachs – are taking steps to limit employees’ trades on the platforms.Goldman Sachs has banned its employees from trading on contracts related to events that are specific to the bank, as well as elections, financial markets, macroeconomic data and geopolitics, according to people familiar with the matter.A representative for Goldman declined to comment on the policy, but did state that the bank prohibits using material, nonpublic information to trade across all markets.While some firms have started developing policies to managing insider trading risks on prediction markets, many others have yet to take those first steps, legal experts say.”We are getting constant questions from clients, particularly among regulated entity clients, about what the regulator expectations are, what the risks are, where the areas of potential liability are,” said David Oliwenstein, a partner and securities enforcement practice lead at Pillsbury.The Polymarket website on a smartphone arranged in Germantown, New York, US, on Tuesday, July 22, 2025. Gabby Jones | Bloomberg | Getty ImagesThe news of an explicit prediction market trading directive at Goldman comes after the first event contract insider-trading case to involve a private sector company. In May, the Commodity Futures Trading Commission and Department of Justice charged Google employee Michele Spagnuolo with using material, nonpublic information to trade on Polymarket contracts related to the browser’s “Year in Search” lists. Using the handle “AlphaRaccoon,” Spagnuolo allegedly collected about $1.2 million in profit, according to the CFTC’s complaint.Legal experts said the sheer …
