TLDR
- Federal authorities indicted a Google information security engineer for alleged insider trading on Polymarket.
- Michele Spagnuolo allegedly leveraged internal Google search trend data to generate approximately $1.2 million.
- The indictment alleges Spagnuolo wagered on Google’s 2025 Year in Search outcomes prior to their public release.
- Charges include commodities fraud, wire fraud, and money laundering.
- This case marks what appears to be the first federal insider trading prosecution involving Polymarket.
Federal authorities have indicted a Google information security engineer on charges related to alleged insider trading involving Polymarket bets.
The U.S. Attorney’s Office for the Southern District of New York accused Michele Spagnuolo of exploiting privileged Google data. According to prosecutors, the 36-year-old leveraged confidential information to generate profits exceeding $1.2 million.
The criminal complaint, which authorities unsealed on May 27, identifies Spagnuolo as a Polymarket user operating under the handle “AlphaRaccoon.” Documents allege he wagered on Google’s 2025 Year in Search results prior to their official announcement.
Spagnuolo made his initial appearance in Manhattan federal court on Wednesday. Prosecutors indicated that court documents show his release on a $2.25 million bond.
Allegations Center on Internal Search Information
According to the prosecution, Spagnuolo held access to proprietary search trend analytics through his position at Google. The complaint emphasizes that this information remained restricted to select personnel.
Google releases its annual Year in Search report each December. This compilation ranks individuals, subjects, and events according to search volume throughout the year.
Federal authorities allege Spagnuolo exploited non-public information between October and December 2025. Throughout this timeframe, he purportedly executed multiple Polymarket wagers connected to Google’s search rankings.
Prosecutors highlighted one particular wager involving artist D4vd. The complaint alleges Spagnuolo bet that D4vd would emerge as Google’s most-searched individual for 2025.
Google published the 2025 Year in Search findings on December 4. According to prosecutors, the outcome aligned with Spagnuolo’s wager.
Justice Department Files Multiple Charges
The Justice Department brought charges of commodities fraud, wire fraud, and money laundering against Spagnuolo. Prosecutors assert these charges encompass both the trading activities and the subsequent handling of funds.
The SDNY complaint alleges Spagnuolo possessed advance knowledge of outcomes before other market participants. Prosecutors maintain he obtained this advantage through access to Google’s proprietary business intelligence.
Reuters identified this prosecution as apparently the first federal insider trading case connected to Polymarket. The platform enables users to purchase and sell contracts based on future event outcomes.
Polymarket functions using blockchain infrastructure and gained prominence throughout the 2024 U.S. presidential election cycle. News organizations frequently referenced its election probability data during that timeframe.
Companies Cooperate with Federal Investigation
Reuters indicated that Google suspended Spagnuolo following the emergence of these allegations. A Google representative informed Reuters that the company provided full cooperation to law enforcement agencies.
Polymarket similarly assisted investigators, Reuters reported. The platform’s involvement occurred as federal regulators intensified scrutiny of prediction market operations.
The complaint alleges Spagnuolo attempted to conceal the origin of the funds following the trades. Prosecutors cite this behavior as justification for the money laundering charge.
U.S. Attorney Jay Clayton’s office emphasized that this case addresses market integrity concerns. Prosecutors stated that established regulations remain applicable regardless of platform technology.
The CFTC reached a settlement with Polymarket in 2022 concerning event-based contracts. Federal and state regulators continue discussions regarding appropriate oversight frameworks for prediction markets.
Prosecutors contend that Spagnuolo’s alleged actions provided him with an unfair competitive advantage over other Polymarket participants. The complaint notes these users lacked access to Google’s proprietary search analytics.
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