Google Engineer Charged with Insider Trading on Polymarket, U.S. Says
By Dietrich Knauth
NEW YORK, May 27 (Reuters) – The U.S. Justice Department has charged a Google software engineer with using confidential company data to manipulate bets on the prediction platform Polymarket, reaping roughly $1.2 million in illicit profits, according to a criminal complaint unsealed Wednesday.
Michele Spagnuolo, a 36-year-old Italian national living in Switzerland, is accused of exploiting internal Google search statistics to wager on unlikely winners of the company’s annual “most-searched” list. The complaint alleges that he placed bets through an account named “AlphaRaccoon,” including a high-stakes prediction that indie pop musician D4vd would top the 2024 list — a bet that paid off handsomely after D4vd’s arrest and charge in a murder case catapulted him to the top spot.
According to the filing in Manhattan federal court, Spagnuolo wagered on D4vd on November 27, a full week before Google publicly released its year-end search data on December 4. At the time, Polymarket odds gave D4vd a “near-zero probability” of winning. The engineer also made an earlier bet in October that rapper Kendrick Lamar would lead the list, after internal data showed Lamar trending toward the top spot.
“Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted,” said Jay Clayton, U.S. Attorney for the Southern District of New York, in a statement.
The case marks one of the first federal prosecutions targeting alleged insider trading in the burgeoning prediction market space, which has drawn increased regulatory scrutiny as platforms like Polymarket grow in popularity. In April, the Justice Department charged a U.S. Army soldier with using classified information to place Polymarket bets on the capture of Venezuelan leader Nicolás Maduro.
Google said in a statement that it is cooperating with law enforcement and that using confidential information for personal gain violates company policy. A Google spokesperson confirmed that Spagnuolo has been placed on leave.
Reuters was unable to immediately identify an attorney representing Spagnuolo. The case is being investigated by the FBI and the U.S. Attorney’s Office for the Southern District of New York. (Reporting by Dietrich Knauth; Editing by Sonali Paul)