U.S. prosecutors have filed criminal charges against Michele Spagnuolo, a software engineer at Google, for allegedly using confidential company information to trade on prediction markets platform Polymarket. According to reports from The Wall Street Journal, prosecutors charged Spagnuolo with fraud and money laundering, while the Commodity Futures Trading Commission filed a parallel civil complaint alleging insider trading violations under the Commodity Exchange Act. As per TechCrunch, Jay Clayton, the United States Attorney for the Southern District of New York, stated that Spagnuolo violated duties owed to his employer and used Google's confidential business information to make more than $1.2 million in trading profits on Polymarket. The case comes amid growing concern about insider trading on prediction markets, with charges against Spagnuolo coming just over a month after a U.S. Army Special Forces master sergeant was charged with using classified information about the operation to capture then-Venezuelan President Nicolas Maduro to make $400,000 on Polymarket. Clayton derided "greed-driven" insider trading, saying it "compromises the integrity of our markets" and reinforces that "corporate insiders cannot use confidential business information to turn a profit in our markets."
Between October and December 2025, Spagnuolo allegedly used an account known as 'AlphaRaccoon' to place trades on Polymarket, as reported by The Block. He participated in at least 23 contracts tied to the platform's '2025 Year in Search List,' including markets such as '#1 Searched Person on Google this year' and 'Top 5 Most Searched People on Google 2025.' According to the latest complaint, Spagnuolo risked over $2.75 million on wagers related to Google's 2025 Year in Search campaign, a marketing initiative where Google reveals the world's most popular searches of the year. The complaints alleged that Spagnuolo earned approximately $1.2 million in profits from Polymarket trades based on his access to inside information, including confidential, internal Google Search data about the most-searched celebrities. When D4vd was publicly announced as the top-searched person in December, Spagnuolo allegedly made around $1.2 million from his bets. Court papers revealed that Spagnuolo's most lucrative alleged wins were correctly predicting who would and would not be the most searched for person on Google in 2025, including placing bets against names like Bianca Censori and President Donald Trump, and choosing the singer D4vd as taking the top spot when the betting platform had odds of that result being near zero. Prosecutors noted that unlike counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did because he had accessed Google's confidential, commercially valuable internal data.
The most intriguing aspect of this case is the apparent mismatch between what Spagnuolo allegedly stood to gain and what he risked losing. As reported by The Wall Street Journal, the indictment contains no explanation for why someone with his professional standing would take such a gamble for a sum that, by senior technology compensation standards, is relatively modest. Matt Schulman, CEO and founder of Pave, an AI platform for compensation data, noted that the upper end of salary ranges for comparable roles at large public technology companies sits at approximately $1.24 million annually, with the majority being equity. "That makes the stakes of anything that could jeopardize their employment extremely high," Schulman said. When Spagnuolo joined Google in 2014, Alphabet shares were trading below $30, but they have since surpassed $380, meaning accumulated equity over a decade could represent a significant multiple of his alleged Polymarket winnings. Spagnuolo's professional record shows a decade of awards and conference invitations, with Google recruiters first approaching him in 2011 while he was completing graduate degrees, and the company hiring him in 2014 after he impressed with technical security expertise.
The FBI's investigation into Spagnuolo's activities was facilitated by a critical mistake in his withdrawal process. According to The Wall Street Journal, when Spagnuolo moved to withdraw his Polymarket winnings in December, he took multiple steps to obscure the digital money trail, including routing funds through a cryptocurrency transfer service offering enhanced privacy protections. However, the concealment effort came undone because of an earlier, less carefully handled withdrawal in November, when he transferred nearly $150,000 from Polymarket to a cryptocurrency swapping service. Shortly after, an identical sum moved from that service to a payment processor, where it arrived in an account registered in Spagnuolo's name and opened using his Italian government identification document. This paper trail gave federal investigators the link they needed to connect the funds directly to him, ultimately leading to his arrest and charges. Spagnuolo, a 36-year-old Italian citizen residing in Switzerland and Google employee for over 12 years, faces charges of commodities fraud, wire fraud, and money laundering, which carry maximum prison sentences of 10 years, 20 years, and 20 years respectively, according to The Block.
