Goldman Sachs warns staff to donate betting profits for policy violations

Goldman Sachs has warned its employees that they could be forced to give away all of their winnings if they are found betting on restricted prediction markets. According to the Financial Times, employees have been told to limit their activity on prediction markets to sports and entertainment. The bank warned that repeated violations could also lead to dismissal as it seeks to prevent conflicts linked to insider information and financial markets. The decision comes as the Wall Street bank tightens rules over compliance risks linked to these platformsGoldman tightens rules on prediction market bettingAccording to the report, Goldman informed employees of the new policy through an internal memo. The bank told staff they should only use prediction market platforms for sports and entertainment bets. Markets tied to elections, interest rates, stock indexes and other financial or political events are off limits.Employees who break the rules may have to donate all of their profits from prohibited bets. Multiple violations could also result in losing their jobs, according to a person familiar with the matter.Large financial institutions have strict rules on employee trading because workers may have access to material non-public information that could affect markets. Prediction market platforms such as Kalshi and Polymarket have expanded beyond sports betting, allowing users to wager on political events, economic data and financial markets.Their rapid growth has raised concerns that people with advance knowledge of major events could profit from those bets.Prediction markets face growing scrutinyThe FT report noted several recent incidents that have drawn attention to the industry.Organizers of the Nobel Peace Prize investigated a possible information leak after successful bets were placed on the eventual winner before the announcement.In another case, a U.S. special forces soldier allegedly placed bets on Polymarket using advance knowledge of an operation targeting Venezuelan leader Nicolás Maduro.Get the latest technology news and updates. Download the TOI App.