Google Engineer Charged with Insider Trading on Polymarket, Allegedly Made $1.2M Betting on Search Trend
(Bloomberg) -- A Google software engineer was charged with insider trading on Polymarket, where prosecutors say he used confidential internal data to place bets that earned him more than $1 million on one of last year’s most attention-grabbing internet searches.
Michele Spagnuolo, 36, a Google employee since 2014 and an Italian citizen, was charged in a federal complaint unsealed Wednesday in New York. He appeared before a magistrate judge and was released on a $2.25 million bond. His attorney, Mike Ferrara, declined to comment.
The case is the latest in a string of insider-trading allegations tied to prediction markets, raising fresh questions about the integrity of platforms that allow users to bet on the outcomes of news events, elections and cultural phenomena. Just over a month earlier, a U.S. Army Special Forces master sergeant was charged with using classified information about an operation to capture then-Venezuelan President Nicolas Maduro to make $400,000 on Polymarket.
According to the complaint, Spagnuolo had access to Google’s internal data tracking trending search queries. He allegedly used that access to bet that singer D4vd — whose real name is David Anthony Burke — would be Google’s most-searched person of 2025. D4vd was later charged with murdering a 14-year-old girl and has pleaded not guilty.
At the time of Spagnuolo’s bets, Polymarket had assigned a “near-zero probability” that D4vd would beat out figures like Pope Leo XIV or rapper Kendrick Lamar, prosecutors said. When Google publicly announced D4vd as the year’s top-searched person in December, Spagnuolo’s account — operating under the username “AlphaRaccoon” — made roughly $1.2 million.
“We’re working with law enforcement on their investigation,” 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’ve placed the employee on leave and will take the appropriate action.”
Prosecutors allege Spagnuolo tried to conceal his trades by using a cryptocurrency privacy service. After users on X and Discord speculated that AlphaRaccoon was a Google insider betting on the search rankings, his account vanished from the market. The Commodity Futures Trading Commission filed a parallel civil suit Wednesday, seeking penalties and disgorgement of profits. One of the accounts linked to Spagnuolo used his Italian government ID, the CFTC said.
The growing scrutiny of insider trading on prediction markets has pushed Polymarket to tighten its rules. In March, the company updated its terms to explicitly prohibit wagers based on stolen confidential information or attempts to influence an event’s outcome. It is also partnering with blockchain analytics firm Chainalysis, as well as Palantir and TWG AI, to detect suspicious activity, especially on sports bets placed through its U.S. exchange.
Polymarket has touted its cooperation with authorities. “With 2 out of 2 arrests in this industry resulting from our criminal referrals, Polymarket has emerged as the enforcement leader,” the company posted on X.
Despite these efforts, Polymarket’s main business operates offshore, beyond the reach of U.S. regulators, and sometimes allows registration without identity checks. While its terms bar U.S. customers, many traders have openly acknowledged using VPNs to bypass restrictions.
Gannon Ken Van Dyke, the Army sergeant charged in the Maduro-related insider trading case, has pleaded not guilty.
The case is U.S. v. Spagnuolo, U.S. District Court, Southern District of New York. — With assistance from Ava Benny-Morrison, Nathaniel Popper and Denitsa Tsekova. (Updates with CFTC complaint in ninth paragraph.)
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