A Google software engineer has been arrested and charged with fraud after allegedly using confidential company information to place winning bets on the prediction market platform Polymarket, netting more than $1.2 million in profits. Michele Spagnuolo, 36, an Italian citizen living in Switzerland, was brought before a federal judge in New York on Wednesday following an investigation led by the US Attorney for the Southern District of New York and the FBI.
Prosecutors allege that Spagnuolo, who had worked at Google for more than 12 years in information security, accessed internal marketing data through a tool available to all company employees and used that information to place approximately $2.75 million in bets on Polymarket between October and December 2024. The bets were linked to the results of Google's annual "Year in Search" list — a widely followed ranking of the most-searched terms and people on the platform. Trading under the account name "AlphaRaccoon" and using cryptocurrency spread across several accounts, Spagnuolo allegedly predicted with unusual accuracy who would top Google's most-searched person list. His most lucrative move was betting on indie pop musician d4vd — at near-zero odds — to claim the top spot, a prediction he allegedly made hours after accessing the confidential data. The FBI linked his various accounts by tracing one he had opened using an Italian identification card, exploiting the transparent, traceable nature of blockchain-based cryptocurrency transactions.
Spagnuolo faces charges of commodities fraud, wire fraud, and money laundering. He has been released on a $2.25 million bond. Google confirmed it is cooperating with law enforcement and has placed Spagnuolo on leave, noting that using confidential information for personal financial gain constitutes a serious breach of company policy. Polymarket, which operates exclusively in cryptocurrency, said it worked closely with authorities throughout the investigation.
The case is the latest to raise questions about insider trading on prediction markets, which allow users to wager on the outcomes of real-world events. Last month, a US soldier was separately charged with using classified military intelligence to bet on Polymarket regarding the capture of Venezuelan President Nicolás Maduro, allegedly profiting more than $400,000. US Attorney Jay Clayton underscored the broader stakes: "Corporate insiders cannot use confidential business information to turn a profit in our markets. Insider trading compromises market integrity, and the American people want this greed-driven conduct investigated and prosecuted." Polymarket noted that it is the only prediction platform whose cooperation with authorities has so far resulted in insider trading charges in the United States.