Federal prosecutors charged a Google software engineer with commodities fraud, wire fraud, and money laundering on Wednesday, alleging he used confidential company data to place more than $2.7 million in bets on the prediction market platform Polymarket, and walked away with roughly $1.2 million in profits.
Michele Spagnuolo, a 36-year-old Italian citizen living in Switzerland, allegedly exploited his access to Google's closely held "Year in Search" data to bet on outcomes he already knew, The Hill reported. The Department of Justice filed a seven-page criminal complaint in the Southern District of New York. The Commodity Futures Trading Commission filed a parallel civil action the same day.
If convicted on all three counts, Spagnuolo faces up to 50 years in prison.
Spagnuolo created his Polymarket account in May 2024 under the alias "AlphaRaccoon." From October through December of last year, he placed bets tied to Google's not-yet-published annual search trend rankings, information the company treats as confidential marketing material before its public release.
The trades were not random. The New York Post reported that Spagnuolo adjusted his bets as internal Google data evolved, including wagers on whether Kendrick Lamar or the artist D4vd would top the company's most-searched list. He correctly bet that D4vd would be Google's most-searched person of 2025, placing a $381.12 wager just three hours after accessing internal data showing D4vd had replaced Lamar.
That kind of timing does not look like a lucky guess. It looks like someone trading on a sure thing.
After Google publicly announced its Year in Search results, Spagnuolo's account collected roughly $1.2 million. Prosecutors allege he then moved to cover his tracks. The complaint states that "once he won, Spagnuolo then took deliberate steps to conceal his unlawful use of nonpublic information by attempting to obscure the source and ownership of his unlawful proceeds."
The criminal complaint charges one count each of commodities fraud, wire fraud, and money laundering. The CFTC's civil complaint, filed in the same court, seeks restitution, disgorgement of profits, civil monetary penalties, trading and registration bans, and a permanent injunction barring Spagnuolo from further violations of the Commodity Exchange Act.
Jay Clayton, the U.S. Attorney for the Southern District of New York, framed the case as a straightforward application of longstanding market rules. As AP News reported, Clayton said:
"Today's charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets."
That message carries extra weight now. Prediction markets like Polymarket have surged in popularity and political visibility, but they operate in a regulatory gray zone that federal enforcers are only beginning to patrol seriously.
This is the second federal insider trading case tied to a prediction market. The first involved an Army special forces sergeant charged with using classified intelligence to win $400,000 on a Polymarket bet about Venezuelan President Maduro. That case drew national attention to the vulnerability of prediction platforms to exploitation by people with privileged access to nonpublic information.
Spagnuolo's case is different in one respect: the confidential data came from a private corporation, not a government intelligence agency. But the underlying problem is the same. When insiders can trade on information the public does not have, the market is rigged, whether the asset is a stock, a commodity, or a prediction contract.
The question of how privileged information gets weaponized for personal gain has also surfaced in other high-profile contexts. Allegations of insider trading tied to government decision-making have drawn scrutiny across the political spectrum, underscoring how seriously the public takes the issue.
Google confirmed it is cooperating with law enforcement and placed Spagnuolo on leave. A company spokesperson said the engineer "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."
That statement raises its own questions. If the Year in Search data was accessible through a tool open to every Google employee, how many other workers could have done the same thing? Google did not say whether it has tightened access controls since discovering the breach, or whether it conducted an internal review of other employees who accessed the same data.
Spagnuolo has worked at Google since 2014, Breitbart reported. His role was described as a security engineer, someone whose job, ironically, involves protecting systems and data from misuse.
Polymarket, for its part, has not issued a public statement about the case. The platform has not addressed whether its own compliance systems flagged the AlphaRaccoon account or the unusually precise timing of Spagnuolo's trades.
Prediction markets have earned a place in American public life. Polymarket drew massive traffic during the 2024 presidential election and has become a real-time barometer for everything from Federal Reserve decisions to pop culture outcomes. Proponents argue these markets aggregate information more efficiently than polls or punditry.
But efficiency means nothing if the information being aggregated is stolen. Two federal insider trading cases in a matter of months suggest that prediction markets are attracting exactly the kind of bad actors that traditional securities markets spent decades learning to police.
Wall Street has the SEC. Commodities markets have the CFTC. Prediction markets are still figuring out who watches the store, and the people with inside knowledge are moving faster than the regulators.
Spagnuolo risked $2.7 million and netted $1.2 million. He allegedly used a fake name, exploited a tool his employer made available to every worker, and then tried to hide the money. None of that happened in a dark corner of the internet. It happened on a platform that millions of Americans now treat as a trusted information source.
If prediction markets want to be taken seriously, they need to be policed seriously. Right now, the enforcement is coming after the fact, one complaint at a time, while the next insider with a clever alias is already placing bets.