US charges Google engineer over Polymarket insider trading allegations

The U.S. Justice Department has charged a Google software engineer with using confidential company information to place wagers on the prediction market Polymarket, according to a complaint unsealed Wednesday in federal court in Manhattan. Prosecutors allege the trades were tied to outcomes for Google’s annual “most-searched” lists and generated about $1.2 million in profits. The defendant, Michele Spagnuolo, is a 36-year-old Italian citizen who lives in Switzerland.

The complaint says Spagnuolo used an account called “AlphaRaccoon” to place bets before Google publicly released its statistics. Authorities allege he drew on internal Google data that was not available to the public at the time of the wagers.

Google said it is cooperating with law enforcement and placed Spagnuolo on leave, calling the alleged conduct a serious breach of company policy. Polymarket said it assisted in the investigation, and described the case as the first time its cooperation has led to insider trading charges in the United States.

Allegations focus on Google’s most-searched lists

Prosecutors say Spagnuolo placed bets on long-shot outcomes that later proved correct after Google published its year-end lists. One example cited in the complaint involves a wager that indie pop musician D4vd would be Google’s most-searched person of the year.

The complaint says Spagnuolo placed that bet on November 27, before Google released the statistics on December 4. It alleges market probabilities for D4vd winning were near zero at the time, making the bet particularly profitable once the outcome became public.

Authorities also allege Spagnuolo bet in October that rapper Kendrick Lamar would top the list, at a time when Google’s internal data showed he was on track to be the most-searched person of the year.

Prosecutors cite broader focus on prediction markets

U.S. Attorney Jay Clayton said prosecutors would pursue corporate insiders who use confidential business information to profit in prediction markets. The complaint was filed in federal court in Manhattan.

The case follows an earlier federal prosecution in April in which prosecutors charged a U.S. Army soldier with using classified information to place Polymarket bets related to the capture of Venezuelan leader Nicolas Maduro.

The next steps will come in court as the case proceeds, including any initial appearance and responses from the defense.