U.S. prosecutors have leveled insider trading charges against a Google employee, alleging the engineer exploited confidential company data to earn over $1.2 million through bets on a prediction market platform. The complaint, unsealed in New York, identifies the accused as Michele Spagnuolo, a 36-year-old Italian citizen residing in Switzerland and a Google employee since 2014. Operating under the pseudonym “AlphaRaccoon,” Spagnuolo reportedly used information about Google’s 2025 “Year in Search” data prior to its public release to place wagers on the most searched individuals.
According to the charges, Spagnuolo adjusted his bets in response to internal data changes between October and December of last year. Initially, he predicted that Kendrick Lamar would lead the search trend, particularly following his role in the 2025 Super Bowl halftime show. However, internal Google data later revealed that alt-pop singer D4vd was gaining in popularity, prompting Spagnuolo to modify his bets. D4vd, whose real name is David Burke, was recently charged with the murder of 14-year-old Celeste Rivas Hernandez.
The complaint further details Spagnuolo’s use of the prediction market’s “yes” or “no” wagers to make additional trades concerning other individuals’ standings in the anticipated Google search trends. Following the data’s public release on December 4, the AlphaRaccoon account reportedly generated significant profits, which were later traced by the FBI through cryptocurrency transactions.
A legal representative for Spagnuolo has yet to be identified. Meanwhile, Google has confirmed the employee’s placement on leave while stating that the company is cooperating with law enforcement. A Google spokesperson noted that while the employee accessed marketing materials using a tool available to all staff, utilizing this information for betting constitutes a serious violation of company policy.
Polymarket, the prediction platform involved, stated it has been cooperating with authorities. A company representative highlighted that it is the only prediction market to have facilitated insider trading charges in the United States, emphasizing that its blockchain trading system is designed to be transparent and traceable.
This case is not an isolated incident. Last month, federal authorities also charged a special forces soldier who allegedly made more than $400,000 from Polymarket trades based on classified information regarding the fate of former Venezuelan President Nicolás Maduro, which he was privy to ahead of a military operation.
These events shine a light on the increasingly complex and speculative realm of online prediction markets, which operate under different regulations than traditional gambling. The legal framework surrounding these markets remains ambiguous, raising concerns about consumer protections. Efforts to regulate this sector have faced pushback, with previous governmental support for prediction companies leading to lawsuits against states trying to impose restrictions.
In light of recent scandals, Polymarket has updated its rules to explicitly prohibit trading based on confidential information or events that a user could influence. Spagnuolo is charged with multiple offenses, including violating the U.S. Commodity Exchange Act, wire fraud, and money laundering, and could face a significant prison sentence if convicted.
