Federal prosecutors have charged a Google employee in a high-profile insider trading case tied to the prediction platform Polymarket. The case centers on allegations that confidential Google data was used to place multimillion-dollar wagers before the information became public.
According to a seven-page complaint filed in the Southern District of New York, the Department of Justice accused 36-year-old Michele Spagnuolo, a software engineer at Google, of exploiting access to Google’s confidential “Year in Search” data between October and December 2024. Prosecutors claim the nonpublic information gave him an advantage while betting on Polymarket markets linked to search trends and public interest topics.
Authorities said Spagnuolo allegedly risked more than $2.7 million through an account created under the alias “AlphaRaccoon” in May 2024. After Google publicly released the information, the account reportedly generated around $1.2 million in profits.
Spagnuolo, an Italian citizen living in Switzerland, now faces one count each of commodities fraud, wire fraud, and money laundering. If convicted on all charges, he could face a maximum prison sentence of 50 years, according to the DOJ.
Google Responds to the Allegations
Google confirmed it is cooperating with investigators. A spokesperson told *The Hill* that the employee accessed internal marketing material through a company tool available to staff members. The spokesperson added that using confidential company information for betting activity represented “a serious breach” of corporate policy.
The company also confirmed that Spagnuolo has been placed on leave while the investigation continues.
Federal officials used strong language while discussing the case. Jay Clayton, the U.S. Attorney for the Southern District of New York, stated, “Corporate insiders cannot use confidential business information to turn a profit in our markets.”
Clayton also alleged that Spagnuolo “violated the duties he owed to his employer” by using Google’s internal data to secure more than $1.2 million through Polymarket trades.
CFTC Files Separate Complaint
The Commodity Futures Trading Commission also filed a civil complaint against Spagnuolo in federal court on Wednesday. The agency is seeking financial penalties, restitution, trading bans, registration restrictions, and a permanent injunction tied to alleged violations of the Commodity Exchange Act.
CFTC Chairman Michael Selig said the commission “will not tolerate fraud, manipulation, or insider trading, regardless of the technology or platform on which those actions occur.”
Selig added that the action highlights the agency’s push to protect market integrity within prediction markets, which continue to face growing legal and political scrutiny in the United States.
The issue has also attracted attention from the Trump administration. Federal officials recently challenged regulations introduced by several Democratic-led states regarding prediction market activity. President Trump stated Tuesday that it remains “critically important” for the CFTC to maintain exclusive authority over these platforms.
Growing Scrutiny Around Prediction Markets
The case against Spagnuolo is not the first insider trading investigation tied to prediction markets.
In April, federal prosecutors accused U.S. Army soldier Gannon Ken Van Dyke of placing Polymarket bets linked to plans involving Venezuelan President Nicolás Maduro. Prosecutors claimed he used sensitive information obtained during operational planning to place those wagers.
Meanwhile, concerns about prediction market activity have grown in Washington. In March, the White House warned staff members not to use nonpublic information when making financial trades. A month later, the Senate unanimously approved a resolution that bars senators, staffers, and other chamber officials from trading on prediction market platforms.
At the same time, regulators have increased their focus on these markets. They argue that confidential information can give participants an unfair advantage and weaken trust in the system.
The allegations against Michele Spagnuolo present another major challenge for prediction market oversight in the United States. Federal prosecutors and regulators continue to pursue cases involving insider trading on digital betting platforms.
As the investigation moves ahead, the case could influence future discussions about access to confidential information, corporate responsibility, and the rules governing online prediction markets.