SouthernWorldwide.com – A Google software engineer has been apprehended and faces federal charges for allegedly engaging in insider trading on the prediction market platform Polymarket. Michele Spagnuolo is accused of profiting over $1.2 million by leveraging confidential company information.
Court documents released by the Justice Department detail how Spagnuolo allegedly utilized an internal Google tool late last year. This tool allowed him to access data on Google’s top trending searches for 2025. He then reportedly placed substantial bets on Polymarket concerning whether specific celebrities would appear in the top search results before Google publicly released its annual “Year in Search” report.
The singer D4vd ultimately ranked as the most searched person of 2025. This followed a period where the artist garnered significant national attention due to a connection with a disturbing crime. Spagnuolo, using the Polymarket username “AlphaRaccoon,” is accused of correctly betting hundreds of dollars that D4vd would be among the most searched individuals. At the time of his bets, the market’s assessment of D4vd’s chances of appearing was considered quite low.
Within days of the “Year in Search” data becoming public knowledge, Spagnuolo’s Polymarket account allegedly saw millions of dollars in cryptocurrency transferred to a crypto wallet. This transaction followed his purported insider trading activity.
Spagnuolo has been charged with multiple offenses, including commodities fraud, wire fraud, and money laundering. The Commodity Futures Trading Commission has also initiated a civil lawsuit against him on similar grounds, seeking to hold him accountable for his actions.
The charges against Spagnuolo, who is an Italian citizen residing in Switzerland, were officially unsealed on Wednesday. He was arrested in New York on the same day and subsequently appeared before a magistrate judge. He was released on a $2.25 million bond, as confirmed by the U.S. Attorney’s Office for the Southern District of New York to CBS News.
In response to the allegations, a Google spokesperson stated that Spagnuolo has been placed on leave. The tech giant is reportedly cooperating with law enforcement agencies in their investigation.
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“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,” the spokesperson commented, emphasizing the violation of company protocols.
Polymarket also issued a statement on X, indicating that they had flagged the trader’s suspicious activity. A company spokesperson affirmed their close collaboration with federal authorities, highlighting Polymarket’s role as the first prediction platform to have its cooperation lead to insider trading charges in the United States.
This case follows a similar prosecution just one month prior. A U.S. special forces soldier was arrested for allegedly profiting over $400,000 by betting on the successful raid to capture former Venezuelan leader Nicolás Maduro. This bet was reportedly placed before the raid’s details were made public. The soldier has pleaded not guilty to the charges.
These incidents have brought to the forefront concerns regarding the potential for insider trading on prediction markets, which have seen a significant surge in popularity in recent years. Earlier this year, a data analyst shared insights with “60 Minutes,” detailing how they had observed other instances of Polymarket accounts accumulating substantial profits by accurately predicting outcomes related to U.S. military operations. These predictions sometimes achieved an exceptionally high success rate.
Polymarket maintains that insider trading is strictly prohibited on its platform. The company asserts its commitment to policing misconduct and reporting illegal activities to federal authorities.
“Blockchain trading is transparent, traceable, and bad actors leave footprints,” a company spokesperson stated. “We are committed to maintaining accurate, fair, and transparent markets as well as enforcing our rules and working with our regulators and law enforcement.”
