A Google software engineer has found himself embroiled in a significant legal battle after being accused of leveraging inside information to secure over $1 million in profits from a prediction market. The allegations against Michele Spagnuolo, a 36-year-old Italian citizen residing in Switzerland, were detailed in a recently unsealed criminal complaint in New York. The complaint outlines that Spagnuolo “misappropriated confidential and valuable nonpublic information” from Google, subsequently using this information to place a series of bets on Polymarket—a prediction market platform.
The timeframe for these bets spans from October to December 2025, focusing on Google’s most-searched individuals of that year. Specifically, Spagnuolo allegedly wagered that prominent figures such as Donald Trump, Pope Leo XIV, and Bianca Censori, Kanye West’s wife, would not be the most searched individuals on Google in 2025. He also placed a bet that the artist D4vd would secure a top-five position, ultimately aiming for the number one spot.
In total, Spagnuolo is reported to have profited approximately $1.2 million from these wagers. However, prosecutors argue that he possessed an unfair advantage due to his access to inside information. According to the complaint, “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.” As a result, he now faces serious charges, including commodities fraud, wire fraud, and money laundering, which come with potential sentences ranging from 10 to 20 years in prison.
Alongside the criminal charges, the Commodity Futures Trading Commission (CFTC) has filed an insider trading complaint against Spagnuolo. A Google spokesperson confirmed that the employee is currently on leave and stated, “We’ve placed the employee on leave and will take the appropriate action.” The spokesperson further explained that while Spagnuolo accessed information through a tool available to all employees, using that confidential information for betting is a serious violation of the company’s policies.
Polymarket has also been cooperating with the U.S. Attorney’s Office and the CFTC regarding the case. The company emphasized its status as the only prediction platform whose cooperation has led to insider trading charges in the United States. This development comes shortly after a separate incident in which an American soldier was arrested for allegedly making over $400,000 betting on Polymarket concerning the timing of Venezuelan leader Nicolás Maduro’s potential removal from office. Such cases, along with others that highlight similarly suspicious betting tied to critical events like U.S.-Iran military actions, have heightened scrutiny of insider trading risks within prediction markets.
In reaction to the growing concerns surrounding these platforms, U.S. lawmakers have proposed legislation aimed at banning specific types of bets, including those related to government actions and events where an individual knows or controls the outcome. Although both Polymarket and its rival Kalshi have stated their opposition to insider trading, the platforms have also suggested that allowing “expert” users to bet can enhance market accuracy.
To counteract the backlash related to insider trading allegations, Polymarket announced a recent partnership with the blockchain analytics firm Chainalysis. The collaboration is intended to facilitate the detection of patterns that could indicate insider trading and market manipulation. Meanwhile, the Trump administration appears to support the prediction markets industry. For example, despite a recent law signed by Minnesota Gov. Tim Walz banning prediction markets in the state, the CFTC has sought to block its implementation. Recently, Donald Trump, who has familial ties to both Polymarket and Kalshi, voiced on Truth Social the crucial importance of maintaining the CFTC’s exclusive authority over prediction markets, asserting that they should not only be preserved but also thrive.
