Google employee’s arrest raises questions about insider trading on prediction markets
A software engineer at Google faces federal charges after allegedly using insider information to make more than $1.2 million on Polymarket.
Michele Spagnuolo, a 36-year-old Italian citizen living in Switzerland, is the latest prediction market user accused of insider trading. While the number of such cases have been mounting, actual arrests and charges have been rare.
Spagnuolo, who traded under the account name “AlphaRaccoon,” is charged with one count of violating the Commodity Exchange Act, one count of wire fraud and one count of money laundering.
Spagnuolo had access to Google’s internal data systems, such as a software tool allowing him to view “confidential, nonpublic data,” the Justice Department said in a complaint filed in a New York federal court.
With this information, the DOJ said, Spagnuolo bet on what Google’s most-searched topics would be in 2025. He had opened his Polymarket account in May 2024.
Between Oct. 15, 2025, and Dec. 4, 2025, court records say, Spagnuolo wagered “Yes” or “No” on at least 23 of the 2025 Year in Search List contracts in Polymarket, with what the DOJ said was “near-perfect accuracy.” Google did not publicly release its 2025 Year in Search list until Dec. 4, 2025.
Spagnuolo placed bets on whether public figures such as Pope Leo XIV, President Donald Trump and d4vd would be among the most-searched people on Google. D4vd is a singer charged with murder in the death of 14-year-old Celeste Rivas Hernandez.
Although D4vd initially had near-zero chances of being the most-searched person on Google, Spagnuolo correctly bet that he would be at the number one spot for 2025.
As AlphaRaccoon, Spagnuolo allegedly risked more than $2.7 million on prediction market bets. Ultimately, federal officials said, he earned a profit of about $1.2 million.
“Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets,” U.S. Attorney Jay Clayton of the Southern District of New York said in a statement. “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.”
Google said Spagnuolo has been placed on leave.
“We’re working with law enforcement on their investigation,” a Google spokesperson told Straight Arrow. “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.”
In a statement emailed to Straight Arrow, a Polymarket spokesperson said the company worked closely with the U.S. attorney’s office and the Commodity Futures Trading Commission.
“Blockchain trading is transparent, traceable, and bad actors leave footprints,” the spokesperson said. “We are committed to maintaining accurate, fair, and transparent markets as well as enforcing our rules and working with our regulators and law enforcement.”
Calls for more oversight
Last month, a U.S. Army special forces soldier was arrested after he allegedly used classified information to bet on former Venezuelan president Nicolás Maduro’s capture, also on Polymarket. Master Sgt. Gannon Ken Van Dyke, a 38-year-old from North Carolina who participated in what was dubbed “Operation Absolute Resolve,” ultimately won about $409,881 on his wagers, authorities said.
After Van Dyke’s arrest, Polymarket stepped up its oversight of trades by partnering with the blockchain analytics firm Chainalysis to track transactions in real time, creating a system that scans for trading patterns tied to inside knowledge. The system is designed to surface those signals quickly for investigators.
Lawmakers have called for more oversight over prediction markets, and state officials have taken legal action against them for violating their gambling regulations.
A Minnesota law that takes effect in August will ban prediction markets from operating in the state. The Trump administration sued to block the law, and President Donald Trump called Gov. Tim Walz and other state officials “SCUM” for taking action against prediction markets.
Trump wrote on Truth Social that maintaining the CFTC’s exclusive authority over prediction markets is “critically important.”
“Under my leadership,” he said, “we are setting ‘rules of the road’ that are the Gold Standard for the States.”
However, the CFTC has been criticized for lax regulation of prediction markets. A New York Times investigation found that the commission’s acting chair, Caroline D. Pham, and her senior counsel had given favorable rulings to three companies tied to Trump’s family businesses. These companies were Polymarket, Gemini Titan and Crypto.com.
The Times reported that during the past 16 months, the Trump administration shrunk the commission’s workforce, purged career officials, and “helped out prediction markets at virtually every turn.”
Davis Ingle, a White House spokesperson, told The Times, “there are no conflicts of interest,” even though members of Trump’s family have struck deals with prediction market operators.
In a Wall Street Journal Op-Ed published on May 1, current CFTC chair Mike Selig said claims of rampant insider trading and lax rules “are simply untrue.”
“I’ve made it clear time and time again that anyone who engages in insider trading will be found and prosecuted to the full extent of the law,” Selig, who has been a supporter of prediction markets, wrote.
Now, the White House is reviewing proposed guidelines for regulating prediction markets, according to a notice posted on the Office of Management and Budget’s website, first reported on by Bloomberg.
Ella Rae Greene, Editor In Chief
