Google, Italian Employee in Trouble for Insider Trading of $1.2 Million on Polymarket
A software engineer at Google, an Italian citizen, is at the center of the second federal criminal case in the United States for insider trading related to predictive markets. On Wednesday, the Southern District of New York's Office of the Prosecutor announced the indictment of Michele Spagnuolo, 36, a resident of Switzerland, accused of using confidential company data to place profitable bets on Polymarket.
According to the indictment document, Spagnuolo operated on the platform under the alias AlphaRaccoon, an account opened in May 2024. Between October 15 and December 4, 2025, he allegedly wagered around $2.75 million on markets tied to internal information from Google, resulting in a profit of about $1.2 million once the data became public and the bets closed.
How the Scheme Worked
The scheme revolved around Year in Search, the annual ranking of the most searched terms and individuals that Google publishes at the end of the year. By virtue of his role, Spagnuolo had access to the company’s internal systems, including a software tool that displayed confidential and non-public data. That tool prominently featured the label "Google Confidential" in red, and the engineer had signed the internal rules on confidentiality and ethics.
Among the contested positions, the prosecution cites a bet on the fact that the singer known as d4vd would be the most searched individual of the year. When Spagnuolo placed the bet, Polymarket assigned nearly zero probability to that outcome. Moreover, the account had already come under scrutiny in December when some users of the platform reported the unusual bets from AlphaRaccoon on the year's most searched individual.
Google publicly announced the results of Year in Search 2025 on December 4, and shortly after, the account cashed out. After transferring the proceeds from the cryptocurrency wallet, the engineer reportedly removed the name AlphaRaccoon from his profile. Spagnuolo is facing one count of violating the Commodity Exchange Act (up to ten years in prison), one of computer fraud (up to twenty), and one of money laundering (up to twenty). He was presented before Judge Sarah Netburn and released on bail of $2.2 million with travel restrictions. Meanwhile, the Commodity Futures Trading Commission has opened a separate civil lawsuit.
Not the First Case in Weeks
Last April, the same Prosecutor's Office indicted Gannon Ken Van Dyke, 38, a U.S. special forces military member, accused of exploiting classified information about the capture of Venezuelan President Nicolás Maduro to bet on Polymarket, with profits exceeding $400,000. Van Dyke has pleaded not guilty.
Google stated that it is cooperating with authorities and characterized the use of confidential information for betting as a serious violation of its rules, leading to Spagnuolo's suspension. Polymarket has claimed cooperation with the Prosecutor's Office, asserting that it is currently the only predictive platform whose cooperation has led to insider trading indictments in the United States.
On a regulatory level, predictive markets remain in a less regulated perimeter compared to the stock market: Polymarket contracts are treated as derivatives and fall under the CFTC, not the SEC. However, the profit-driven use of non-public confidential information remains prosecutable as fraud at the federal level.