Prediction markets spark insider trading concerns. Here's how Goldman and other companies are responding

Prediction markets spark insider trading concerns. Here's how Goldman and other companies are responding focuses on regulatory and compliance risks as prediction markets expand. It reports that the Commodity Futures Trading Commission has a “blank canvas” on how it will pursue insider trading cases, according to Karen Woody, a law professor at Washington and Lee University. The article says Goldman Sachs has banned employees from trading contracts tied to events specific to the bank, as well as elections, financial markets, macroeconomic data, and geopolitics. While Goldman declined to comment, a spokesperson stated the firm prohibits trading using material, nonpublic information across all markets. The policy follows the first case involving a private-sector company: in May, the CFTC and Department of Justice charged Google employee Michele Spagnuolo, using the handle “AlphaRaccoon,” over Polymarket “Year in Search” contracts, alleging about $1.2 million in profits. Lawyers cited the growing number of contracts as creating more opportunities for confidential data misuse.