Why It Matters
Federal prosecutors have charged a Google software engineer with fraud and money laundering for allegedly exploiting confidential company search data to place winning bets on Polymarket. The case represents the second major criminal prosecution tied to insider trading on prediction markets and raises questions about corporate data security and the integrity of emerging financial platforms.
What Happened
Michele Spagnulo, a 36-year-old Italian citizen residing in Switzerland, faces one count each of commodities fraud, wire fraud, and money laundering in a federal complaint unsealed in New York. Prosecutors allege that between October and December, Spagnulo used internal Google search tracking data to place bets on Polymarket under the username AlphaRacoon.
The complaint centers on wagers that singer D4vd would rank as Google’s most-searched person in 2025. At the time Spagnulo placed the bets, the prediction market assigned near-zero probability to that outcome. Spagnulo allegedly knew the result in advance by accessing confidential Google data unavailable to other bettors.
After winning, prosecutors say Spagnulo took steps to conceal the source and ownership of his proceeds. Google confirmed the employee accessed marketing material using a tool available to all staff but stated that using such information for betting constitutes a serious policy violation. The company has placed Spagnulo on leave and is cooperating with law enforcement.
By the Numbers
Spagnulo earned more than $1.2 million from his wagers. The bets were placed over a three-month period from October through December. Google employs tens of thousands of workers worldwide, many with access to internal tools and data systems.
Zoom Out
This marks the second significant criminal case linked to Polymarket trades. In April, federal authorities charged a U.S. Special Forces soldier with using classified information about a military raid in Venezuela to place bets on the platform. That defendant, Gannon Ken Van Dyke, has pleaded not guilty.
Prediction markets like Polymarket have grown rapidly as platforms for wagering on real-world events, but they face increasing scrutiny over market integrity and potential misuse of non-public information. Federal prosecutors have signaled a willingness to pursue insider trading charges in these emerging venues with the same vigor applied to traditional securities markets.
What’s Next
Spagnulo has not yet responded publicly to the charges. The case will proceed through federal court in the Southern District of New York. Polymarket officials said the platform is committed to maintaining fair and transparent markets and will continue working with regulators and law enforcement. U.S. Attorney Jay Clayton emphasized that corporate insiders cannot exploit confidential business information for profit in any market.