The Department of Justice (DOJ) has charged a Google engineer with using confidential company information to amass over $1 million in profits through Polymarket, a digital prediction market. New York District Attorney Jay Clayton revealed in a recent statement that Michele Spagnuolo, a 36-year-old software engineer and Italian citizen residing in Switzerland, allegedly leveraged sensitive data from Google to secure more than $1.2 million in trading profits.
Spagnuolo reportedly created a Polymarket account in 2024 under the username “AlphaRaccoon.” Between October and December of the previous year, he is accused of betting approximately $2,754,000 on various markets linked to Google’s internal data. According to James C. Barnacle, Jr., an assistant director at the FBI, Spagnuolo had access to “confidential trends” within the company and may have exploited this information for personal gain.
He faces serious charges, including violations of the Commodity Exchange Act, wire fraud, and money laundering, which together could lead to a maximum sentence of 50 years in prison. Clayton emphasized the significance of the charges, stating, “Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets.”
Spagnuolo’s LinkedIn profile suggests he held a position as a staff information security engineer at Google and was involved in developing infrastructure for deploying AI agents within Alphabet, Google’s parent company.
This case comes amid increasing scrutiny of prediction markets such as Polymarket and Kalshi in the United States. These platforms allow users to place wagers on various events, including sports, politics, and cultural phenomena. However, lawmakers have expressed concerns that these markets can facilitate insider trading. Just last week, Minnesota became the first state to implement a blanket ban on prediction markets, set to take effect in August. Other lawmakers, including California Senator Adam Schiff and Utah Senator John Curtis, have proposed legislative measures aimed at regulating these kinds of markets, exemplified by the “Prediction Markets Are Gambling Act.”
Both Polymarket and Kalshi have asserted that they are implementing safeguards against insider trading, such as prohibiting politicians and athletes from placing bets on the platforms.
