Google Engineer Charged With Insider Trading on Polymarket
A Google software engineer was arrested Wednesday on federal fraud charges after allegedly exploiting confidential company data to place winning bets on a prediction market, AOL.com reported. Michele Spagnuolo, 36, an Italian citizen, faces counts of commodities fraud, wire fraud, and money laundering following the unsealing of a criminal complaint in New York.
How the Alleged Scheme Worked
Prosecutors allege Spagnuolo accessed internal Google tools that tracked user search behavior. He then used that nonpublic data to place bets on Polymarket, a decentralized prediction market platform. Crucially, he allegedly knew outcomes before any public announcement was made. His account, operating under the name AlphaRaccoon, placed wagers on Google’s Year in Search 2025 results. At the time of the bets, Polymarket’s odds assigned a near-zero probability to the correct outcome. Spagnuolo allegedly walked away with $1.2 million after Google’s official Year in Search announcement on December 4, 2025.
Also Read: What Is Polymarket and How Do Prediction Markets Work?
Background: Polymarket and the Growing Fraud Problem
This case marks the second time the U.S. Attorney’s Office for the Southern District of New York has pursued fraud charges tied to Polymarket within a single year. Last month, U.S. Special Forces soldier Gannon Van Dyke pleaded not guilty to charges stemming from allegedly fraudulent bets related to the raid that removed Venezuelan President Nicolas Maduro from power. Van Dyke purportedly had advance knowledge of the operation because he helped plan and execute it. Together, the two cases signal heightened federal scrutiny of prediction markets as financial instruments capable of being manipulated through privileged information.
Also Read: Polymarket Faces Scrutiny After Soldier Charged Over Maduro Bet
Google Responds, Spagnuolo Released on Bond
Google confirmed it is cooperating with law enforcement. A company spokesperson said the employee accessed marketing material through a tool available to all staff, but stressed that using such information for personal financial gain violates firm policy. Spagnuolo has been placed on administrative leave pending further action.
He appeared briefly before a federal magistrate Wednesday and did not enter a plea. The court set his bond at $2.25 million, secured in part by $1 million in cash, with $50,000 required immediately. Prosecutors allege he also took steps to hide the origin of his winnings after the trades settled, adding the money laundering count to an already serious charge sheet.
Read Next: What Is Insider Trading and When Does It Cross the Line?
