A Google employee has been arrested for using sensitive information to win $1.2 million by trading contracts at prediction platform Polymarket.
Michele Spagnuolo, a software engineer at Google, has been charged with commodities fraud, wire fraud, and money laundering.
Key Takeaways
- The Italian national and Switzerland resident was arrested in New York.
- Spagnuolo placed $2.8 million in trades in three months last year.
- Big wins were fueled by the use of Google’s private search data.
Jay Clayton, U.S. Attorney for the Southern District of New York, and James C. Barnacle Jr., FBI New York Field Office assistant director, unveiled the unsealing of the complaint against Spagnuolo on Wednesday.
Spagnuolo, who primarily traded under the account name “AlphaRaccoon,” is accused of using privileged information obtained through his Google employee access to place trades on Polymarket.
He was placed on leave as the company “[works] with law enforcement on their investigation,” a spokesperson said. Polymarket also confirmed it assisted authorities during their probe.
“Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets,” Clayton said. “As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket.
“Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted.”
Further case details claimed that the sensitive information accessed by Spagnuolo was related to marketing. They did so with a tool that was available to all Google employees, but violated insider trading protocols in the process.
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Spagnuolo knew who to target
Spagnuolo – who worked at Google as an engineer focused on information security for at least 12 years – is believed to have used Polymarket since 2024. He placed $2.8 million in trades related to Google and profited more than $1 million from October to December last year. Many of the trades were funded by cryptocurrency, which can be more difficult to track than wire transfers and card deposits.
Spagnuolo’s largest wins were tied to predicting who the most-searched person on Google would be in 2025, according to court documents. He is said to have placed “No” predictions for President Donald Trump, Pope Leo XIV, and others.
He also purchased “Yes” contracts for singer D4vd, who is in jail for allegedly murdering a teenage girl. D4vd had a probability of less than 1% when Spagnuolo placed the trade, which he did knowing the search volume was higher than Polymarket’s prediction markets reflected.
Although Spagnuolo is an Italian citizen who lives in Switzerland, he was taken to face a federal judge in New York on Wednesday. Spagnuolo is currently out on a $2.25-million bond, ABC News reports.
Polymarket fighting insider trading
Prediction market news has largely centered on controversy and methods to reduce nefarious activity, such as insider trading, in recent times.
Polymarket implemented anti-insider trading rules in March and protocols to help cut the number of incidents. This was partly inspired by a U.S. military member with early knowledge of plans to capture former Venezuela President Nicolas Maduro winning more than $400,000 by predicting that Maduro would be taken out of office.
