Key Points
- Google engineer Michele Spagnuolo charged with commodities fraud, wire fraud, and money laundering
- Allegedly used internal Google search-trend data to place $2.7M in bets on Polymarket
- Netted $1.2M in profit across 25 outcomes; CFTC filed parallel civil case
Federal prosecutors in the Southern District of New York charged Michele Spagnuolo, a Google staff information security engineer of 12-plus years, with commodities fraud, wire fraud, and money laundering for allegedly using confidential internal Google data — specifically, search-trend data feeding the company's Year in Search product — to place $2.7 million in bets across 25 outcomes on Polymarket, netting $1.2 million in profit. The CFTC filed a parallel civil case the same day.
The bet that built the case
Spagnuolo, an Italian citizen who lives in Switzerland and traded under the handle "AlphaRaccoon," allegedly placed his largest position on Polymarket's "Most Searched Person on Google in 2025" market. He correctly picked the singer d4vd — using, prosecutors say, internal Google search-volume data that was not public at the time of the bet. The market resolved when Google published its Year in Search list; Spagnuolo cashed out before the public reveal. The 25-outcome pattern across the same market category is what brought federal attention.
The second Polymarket insider case of 2026
This is the second known federal criminal case tied to insider trading on a prediction market. Earlier in 2026, a US Army soldier was charged in a separate matter involving advance knowledge of a different Polymarket outcome. The pattern — career employees with informational access betting against prediction-market participants who don't have it — is the regulatory question prediction markets have not had to answer in size before. Polymarket has not been charged with any wrongdoing; the cases are being brought against the users.
Why the case matters
Prediction markets have been argued by their operators and defenders as efficient information-aggregation mechanisms that price in publicly available signals faster than legacy markets. The Spagnuolo case is the first to test what happens when a high-volume bettor has access to non-public corporate data on a market that resolves on that exact data — which is, structurally, identical to insider trading in equities. The DOJ has now established the precedent that it will prosecute as such. The CFTC's parallel civil action signals the agency is asserting regulatory authority over event contracts as commodities. The combination is a meaningful tightening of the legal grey zone Polymarket has operated in since launch.
Spagnuolo was arrested Wednesday. Google has not publicly commented on his employment status.
Comments