An insider trading scandal has recently emerged, involving a software engineer at Google who is now facing federal charges. The individual in question allegedly utilized confidential company information in order to make bets on the popular prediction market service, Polymarket, leading to him making over $1.2 million in profits. This is the second prosecution of this kind involving a user of Polymarket in recent times, raising concerns regarding insider trading on prediction markets.
Court documents released by the Justice Department revealed that the Google engineer, identified as Michele Spagnuolo, has been accused of exploiting an internal company tool towards the end of the last year to access information about Google’s top-trending searches of 2025. With this confidential information at his disposal, Spagnuolo allegedly placed millions of dollars in bets on Polymarket, predicting whether various celebrities would rank among the most searched people on Google in 2025. These bets were made weeks before Google publicly released this information in its annual Year in Search report.
One of the most widely searched individuals of 2025 turned out to be D4vd, a singer who had captured the attention of the nation the previous year when a dismembered body of a 15-year-old was discovered in the trunk of a car registered in his name. Using the Polymarket username “AlphaRaccoon,” Spagnuolo is accused of accurately betting hundreds of dollars that D4vd would appear in the list of the most widely searched people, at a time when the market assessed the chances of this occurring as quite low.
Following the public announcement of the Year in Search data, it is alleged that Spagnuolo’s Polymarket account transferred millions of dollars in cryptocurrency to a crypto wallet. The charges leveled against Spagnuolo include commodities fraud, wire fraud, and money laundering. In addition to the criminal charges, the Commodity Futures Trading Commission has also filed a civil lawsuit against him on similar grounds.
Spagnuolo, an Italian citizen who resides in Switzerland, was arrested in New York on Wednesday, the same day the charges against him were unsealed. After his appearance before a magistrate judge, Spagnuolo was released on a $2.25 million bond. This information was confirmed by the U.S. Attorney’s Office for the Southern District of New York. CBS News has attempted to reach out to Spagnuolo and his attorney for their comments on the matter.
In response to the charges against their employee, Google has placed Spagnuolo on leave and is cooperating with law enforcement. A spokesperson for the tech giant stated, “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.”
Polymarket has stated that they flagged the trader and worked closely with federal authorities in the investigation. A spokesperson for the company boasted that Polymarket is “the only prediction platform to date whose cooperation has led to insider trading charges in the United States.”
The charges against Spagnuolo follow closely on the heels of another insider trading case from the previous month. A U.S. special forces soldier was arrested for allegedly betting over $400,000 on the raid to capture former Venezuelan leader Nicolás Maduro before the news of the raid was publicly disclosed. The soldier has pleaded not guilty to the charges.
These cases underscore the growing concerns about the potential for insider trading on prediction markets, which have grown in popularity in recent years. A data analyst told “60 Minutes” that he has identified other instances of Polymarket accounts earning millions by accurately predicting U.S. military operations, sometimes achieving an astonishingly high win rate.
Polymarket has stated that insider trading is strictly prohibited on its platform and that it actively monitors for misconduct and reports illegal activities to federal authorities. A company spokesperson said, “Blockchain trading is transparent, traceable, and bad actors leave footprints. We are committed to maintaining accurate, fair, and transparent markets as well as enforcing our rules and working with our regulators and law enforcement.”
The unfolding scandal has put the spotlight on prediction markets and their potential misuse. With the emergence of blockchain and other new technologies, the necessity for robust regulation and oversight has never been clearer. As these cases demonstrate, even large and respected corporations like Google are not immune to these issues. It remains to be seen how this will impact prediction markets and the broader tech industry moving forward.
