(Corrects headline, paragraphs 1, 2, 5 and 6 to make clear that Morgan Stanley’s rules for prediction markets were not specified rather than barring employees from trading; corrects number of sources from one to two and adds attribution for Goldman Sachs information to a source with knowledge of the matter)
July 9 (Reuters) – Wall Street giants Goldman Sachs and Morgan Stanley have added rules for prediction markets to their employee codes of conduct, according to two sources familiar with the matter.
A Goldman Sachs memo, issued previously, said its policy prohibits staff from participating in event-based contracts that could create real or perceived conflicts of interest with the bank, its clients or the broader financial industry, a source with knowledge of the matter said.
Bloomberg News, which first reported the policy, said repeated violations could result in disciplinary action, including termination, and that employees may be required to forfeit gains from prohibited trades.
The restrictions do not apply to prediction-market contracts related to sports and entertainment, the source said.
For Morgan Stanley, a person familiar with the matter said the bank’s employee code of conduct includes rules for prediction markets among other trading and investing topics.
The person declined to specify the policies.
Prediction-market platforms such as Kalshi and Polymarket have grown rapidly, raising concerns about regulatory oversight ahead of U.S. midterm elections.
(Reporting by Pragyan Kalita in Bengaluru, Saeed Azhar and Tatiana Bautzer in New York; Editing by Maju Samuel)
Comments