A Google employee allegedly used insider info to manipulate Polymarket bets

As a Google software engineer just found out the hard way, treating confidential company data as your own personal cheat code is a guaranteed path to federal indictment.

Federal prosecutors have charged Michele Spagnuolo with insider trading for allegedly using confidential Google search data to make more than $1.2 million on Polymarket, ABC News reports. According to a criminal complaint unsealed in New York, the 36-year-old Google employee and Italian citizen living in Switzerland allegedly gained access to nonpublic Google information and used it to place highly accurate bets under the alias “AlphaRaccoon.” Prosecutors said the bets were tied to Google search trends and rankings for “Year in Search” that had not yet been made public.

Authorities say Spagnuolo wagered about $2.75 million and turned those trades into about $1.2 million in profits. One of the largest red flags was a strangely accurate prediction that indie artist D4vd would be the most searched person on Google in 2025, which prosecutors say could not have been reasonably predicted using public information alone.

Investigators claim Spagnuolo also correctly wagered on which celebrities and public figures would and wouldn’t make Google’s annual trending search rankings. The complaint said he exploited internal Google systems to gain an unfair advantage before the data became public.

The US Department of Justice charged him with commodities fraud, wire fraud, and money laundering. He faces decades in prison if convicted on all counts. Law enforcers arrested him in New York, though he has reportedly been released on a $2.25 million bond.

Google said the employee has been placed on leave and that it is cooperating with law enforcement, per the report.

Prediction markets have mostly operated in legal gray areas. Rather than trading stocks, users place bets on the outcomes of politics, world events, sports, or internet trends. Supporters see them as predictive tools. Critics see them as betting sites with weak safeguards against insider activity.

This isn’t the first time Polymarket has been in the hot seat. Earlier this year, lawmakers began calling for tighter oversight after several suspiciously timed bets tied to geopolitical events raised concerns about insider trading. Some regulators and legal scholars say the contracts create new opportunities for people with privileged information to profit quietly before the public catches on.