A software engineer used confidential workplace data to bet $2.7m on Polymarket – and it's a warning for every HR and compliance team
The criminal case against a Google software engineer accused of earning roughly $1.2 million through Polymarket bets is drawing attention to a compliance issue that extends beyond traditional securities markets: the use of confidential workplace information in prediction markets.
Federal prosecutors allege that Michele Spagnuolo, a 36-year-old Google software engineer and Italian citizen living in Switzerland, used internal company data to place bets on Google’s annual Year in Search rankings before the information was released publicly. The allegations were detailed in a criminal complaint unsealed Wednesday in federal court in Manhattan.
Company data used in market wagers
According to the complaint, Spagnuolo used a Polymarket account known as “AlphaRaccoon” to place a series of “yes” and “no” wagers tied to which public figures would appear in Google’s most-searched rankings.
Prosecutors allege that he accessed confidential search trend information through an internal Google software tool displaying a “Google Confidential” banner and used that data to place approximately $2.7 million in bets between October and December.
“Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did because he had accessed Google’s confidential, commercially valuable internal data,” authorities alleged in the complaint.
One of the wagers involved a person identified in the complaint as D4vd, who ultimately became Google’s most-searched person of the year. Prosecutors allege that Spagnuolo placed a bet on 27 November predicting that outcome before Google publicly released its Year in Search rankings on December 4.
The complaint states that prediction markets assigned a “near-zero probability” to D4vd becoming the most-searched person. Prosecutors allege that Spagnuolo wagered $381.12 that D4vd would rank among the most-searched people and another $5 that D4vd would finish first.
Authorities also allege that Spagnuolo placed a bet in October that rapper Kendrick Lamar would become Google’s most-searched person of the year based on internal data indicating Lamar was leading search activity.
Other wagers cited in the complaint included approximately $613,000 betting that Pope Leo XIV would not become the most-searched person and more than $500,000 that President Donald Trump would not top the rankings.
When Google published its results, prosecutors allege that Spagnuolo generated roughly $1.2 million in profits.
Prosecutors pursue prediction market case
Spagnuolo has been charged with commodities fraud, wire fraud and money laundering. He appeared in court Wednesday and was released on a $2.2 million bond with travel restrictions.
US Attorney for the Southern District of New York Jay Clayton said the case demonstrates that authorities will pursue the misuse of confidential business information for profit in prediction markets.
“Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets,” Clayton said.
“As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket. Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted.”
Growing scrutiny of prediction platforms
The case is the second criminal prosecution this year involving allegations of insider trading on a prediction market platform.
In April, federal prosecutors charged a US Army Special Forces soldier with using classified information related to the planned capture of Venezuelan leader Nicolas Maduro to place Polymarket bets. Authorities alleged that the soldier earned more than $400,000 through those wagers. He has pleaded not guilty.
The charges come while prediction market platforms such as Polymarket and Kalshi continue attracting users who place wagers on elections, government actions, sports events and celebrity-related outcomes. Lawmakers have also examined concerns about the potential use of insider information in such markets.
Google cooperating with investigators
Google said it is cooperating with law enforcement and confirmed that Spagnuolo has been placed on leave.
“We’re working with law enforcement on their investigation. 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,” said a Google spokesperson.
An attorney for Spagnuolo could not immediately be identified.
Polymarket said it assisted law enforcement during the investigation and stated that its market integrity systems helped identify suspicious activity. According to the complaint, other users on Discord and X began speculating that the AlphaRaccoon account belonged to a Google insider after a series of successful wagers. Prosecutors allege that Spagnuolo later removed the name from the account.
The case centers on allegations that confidential workplace information was used to place wagers on a prediction market. Prosecutors have argued that insider-trading principles apply when nonpublic business information is used for personal gain, including in emerging markets built around predicting future events.
