A Google software engineer has been charged by the US Department of Justice with using insider information to manipulate bets on the prediction market Polymarket, generating $1.2 million in profits, according to a complaint unsealed on Wednesday.
Details of the Case
Michele Spagnuolo, a 36-year-old Italian citizen, allegedly exploited confidential data to wager on unlikely candidates, including indie pop musician D4vd, who appeared on Google's most-searched list after being arrested and accused of murdering a teenage girl, the complaint states.
D4vd was named the most-searched person of the year in Google statistics released on 4 December. Spagnuolo allegedly used insider knowledge to place bets on 27 November that D4vd would top the list. The bets were particularly lucrative because the markets assigned a "near-zero probability" to D4vd becoming the most-searched person, according to the complaint.
Additional Allegations
Spagnuolo, operating under the account name "AlphaRaccoon," also placed other bets based on Google's most-searched list using insider information. In October, he bet that rapper Kendrick Lamar would top the list, at a time when internal Google data indicated Lamar was on track to be the most-searched person of the year.
Reuters could not immediately identify an attorney for Spagnuolo. He resides in Switzerland, according to the complaint filed in federal court in Manhattan.
Official Statements
Jay Clayton, the US attorney for the southern district of New York, stated: "Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted."
Google confirmed it is cooperating with law enforcement and emphasized that using confidential information for betting is a serious breach of company policy. A Google spokesperson confirmed Spagnuolo has been placed on leave.
Polymarket stated it assisted law enforcement in investigating Spagnuolo's activities and noted it is the only prediction platform whose cooperation has led to insider trading charges in the United States.
Precedent
In April, federal prosecutors charged a US Army soldier with using classified information to place Polymarket bets on the capture of Venezuelan leader Nicolás Maduro.
