Google engineer insider trading charges filed after $1.2M Polymarket wagers
A Google engineer has been charged with insider trading after prosecutors say he used confidential Search data to win $1.2M on Polymarket, marking a rare federal prosecution tied to prediction markets.
Michele Spagnuolo, a software engineer who has worked at Google for more than a decade, was indicted by the U.S. Justice Department in Manhattan after investigators allege he placed large wagers on Polymarket using nonpublic information from Google. Federal prosecutors say those bets yielded roughly $1.2 million in profits and that Spagnuolo carried out the activity under the pseudonym “AlphaRaccoon.” The case was brought by the U.S. Attorney’s Office for the Southern District of New York and reflects growing scrutiny of trading on decentralized prediction platforms.
DOJ Files Charges Against Google Engineer
As set out in the complaint, the Justice Department alleges that Spagnuolo violated duties to his employer by trading on material, nonpublic information. Prosecutors contend he risked more than $2.7 million on positions tied to outcomes in Google’s marketing campaign and then realized over $1.2 million in net gains.
The U.S. Attorney for the Southern District of New York emphasized that insider trading erodes market integrity and that the office pursued the matter in coordination with other regulators. The complaint frames the activity as a deliberate misuse of privileged corporate information to secure an unfair trading advantage on a public prediction market.
Alleged Use of Confidential ‘Year in Search’ Data
According to prosecutors, the trades were informed by internal Google Search data connected to the company’s 2025 Year in Search marketing campaign. That annual initiative publicly lists the most-searched terms and personalities, information that the indictment says Spagnuolo accessed in advance to inform his wagers.
Investigators allege he reviewed internal reports about which celebrities were trending and then placed bets on outcomes that mirrored those trends. The complaint asserts a direct link between the nonpublic analytics he viewed and the timing and size of his positions on Polymarket.
Polymarket Cooperation and Prediction-Market Scrutiny
Polymarket, the prediction platform at the center of the case, told reporters it cooperated closely with prosecutors and regulators and noted that blockchain-based trading leaves an auditable record. The platform’s statement said its transparency enabled investigators to trace wallet activity and identify the trades that triggered the probe.
The case follows other recent enforcement actions tied to prediction markets, including a separate indictment of a military service member accused of using classified knowledge to profit on political outcome bets. Regulators and prosecutors are assessing whether decentralized markets require stronger oversight or clearer compliance frameworks to deter insider trading.
Google’s Internal Response and Employment Action
Google confirmed it is assisting law enforcement and said the employee accessed marketing materials through a tool available to staff, but that using confidential information to place bets violates company policy. The company said it placed the engineer on leave and will take appropriate disciplinary measures as the investigation proceeds.
A Google spokesperson framed the matter as a violation of both internal rules and broader legal obligations, emphasizing the firm’s commitment to safeguarding confidential business information. The company did not disclose personnel or investigatory details beyond confirming cooperation with authorities.
Legal Stakes and Potential Penalties
If convicted, the charges carry serious federal penalties that could include prison time and significant monetary fines, depending on the counts and the court’s assessment. The involvement of the Southern District of New York and references to Commodity Futures Trading Commission cooperation signal that both criminal and regulatory remedies are in play.
Beyond individual punishments, the case raises questions about how existing securities and commodities laws apply to prediction markets and how employers should monitor staff access to marketing and analytics materials. Lawyers and compliance experts say precedent in this area is evolving, and this prosecution could shape enforcement posture for future cases.
Polymarket’s traceability argument—that blockchain records leave an evidentiary trail—may prompt others operating similar platforms to revisit their monitoring and reporting practices. Meanwhile, companies that provide employees with access to sensitive campaign data may tighten controls to prevent unauthorized external use.
The charges against Spagnuolo underscore the intersection of emerging trading venues and traditional insider-trading rules. Regulators have signaled they will continue to pursue cases where private corporate information appears to have been used to influence outcomes on public betting platforms.
Federal prosecutors say the investigation remains active, and the accused will be entitled to contest the allegations in court. Observers note the case could have ripple effects for employees at technology firms, prediction-market operators, and regulators assessing how to police new forms of online trading.
