The US Department of Justice has charged Google software engineer Michele Spagnuolo, 36, with using insider information to place bets on the prediction market Polymarket, earning $1.2 million in profits, according to a complaint unsealed on Wednesday.
Spagnuolo, an Italian citizen living in Switzerland, allegedly used confidential data from Google's most-searched list to bet on long-shot candidates. For instance, he correctly bet that indie musician D4vd, charged with murder, would top the list despite a 'near zero probability' assigned by markets.
The case is part of a broader crackdown on insider trading in prediction markets, which have grown into a multibillion-dollar industry. Federal agencies are scrutinising regulation, though no cohesive framework exists. Former President Donald Trump recently opposed state-level bans on such platforms.
US Attorney Jay Clayton stated that prosecutors will pursue corporate insiders using confidential information for profit. Google confirmed it is cooperating with law enforcement and has placed Spagnuolo on leave. Polymarket assisted in the investigation, marking the first insider trading charges resulting from its cooperation.
