Point72 Asset Management and Balyasny Asset Management have barred employees from participating in prediction markets through personal accounts, according to a report by Bloomberg citing unnamed sources familiar with the policies.
The move reflects growing concern across Wall Street about regulatory and compliance risks posed by fast-growing platforms like Kalshi and Polymarket.
These platforms allow users to trade binary contracts on events ranging from elections and geopolitical developments to corporate earnings and economic data, raising potential insider trading and market manipulation risks. The bans at Point72 and Balyasny go beyond typical personal trading restrictions, which generally focus on conflicts of interest and the use of non-public information.
One key compliance challenge is that these markets, regulated by the CFTC, are treated as derivatives trading, triggering reporting obligations that many exchanges are not fully equipped to handle. This complicates monitoring and increases noncompliance risk.
Other firms are taking varied approaches. JPMorgan Chase & Co maintains that employees must follow standard personal trading rules for prediction markets. Harris | Oakmark and Ocean Park Asset Management are reviewing policies, weighing restrictions against employee trust and educational measures.
Legal experts note a surge in inquiries from investment advisers updating compliance filings with the SEC, emphasising that fraud, fiduciary duty breaches, and misuse of confidential information remain violations, regardless of whether activity occurs on prediction markets.
