U.S. prosecutors have filed insider trading charges against a Google employee, accusing the software engineer of using confidential company information to earn over $1.2 million on the prediction market platform Polymarket. The charges were announced this week, highlighting the misuse of proprietary data for personal gain.
Details of the Allegations
In a complaint unsealed in New York, authorities identified the employee as Michele Spagnuolo, a 36-year-old Italian citizen residing in Switzerland who has worked for Google since 2014. Operating under the online alias "AlphaRaccoon," Spagnuolo allegedly used Google's 2025 "Year in Search" data before its public release to place wagers on Polymarket regarding the most trending individuals searched on Google the previous year.
According to the complaint, Spagnuolo made trades as internal search data evolved from October to December 2025. Initially, he bet that Kendrick Lamar, who headlined the 2025 Super Bowl halftime show, would top search trends. However, after internal data indicated that alt-pop singer D4vd (David Burke) was leading search volumes, he placed new bets. D4vd was charged last month with murdering 14-year-old Celeste Rivas Hernandez.
Using Polymarket's "yes" or "no" wagers, Spagnuolo also traded on whether other individuals would appear in Google's 2025 search trends. After the data was published on December 4, his AlphaRaccoon account realized substantial profits. An FBI investigation traced the funds through cryptocurrency payments.
Legal and Corporate Responses
Jay Clayton, U.S. Attorney for the Southern District of New York, stated, "These charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets. Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted."
An attorney for Spagnuolo was not immediately identified. Google confirmed to the Associated Press that it had placed the employee on leave. A Google spokesperson said, "The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies. We are working with law enforcement and will take the appropriate action."
Polymarket also confirmed cooperation with authorities. A spokesperson noted that the company "is the only prediction platform to date whose cooperation has led to insider trading charges in the United States" and emphasized that blockchain trading is "transparent, traceable, and bad actors leave footprints."
Broader Context and Implications
This case is not the first involving insider trading on Polymarket. Last month, the government charged a special forces soldier who made over $400,000 from Polymarket trades by betting on the downfall of former Venezuelan President Nicolás Maduro, using classified information from a U.S. military operation he participated in.
Such scandals have drawn attention to the speculative world of prediction markets, which operate 24/7 and sell event contracts. These platforms are regulated differently from traditional gambling, raising concerns about consumer protections and legal battles over government oversight. The Trump administration has supported operators and sued several states over regulation efforts. Meanwhile, the industry is implementing new safeguards. Polymarket recently updated its rules to prohibit trading on contracts where users might possess confidential information or could influence an event's outcome.
Spagnuolo faces charges under the U.S. Commodity Exchange Act, wire fraud, and money laundering. He could face years in prison if convicted.
