Google Employee Insider Trading Charges: $1.2M Made on Polymarket Bets
Google employee insider trading charges have surfaced after federal authorities arrested Michele Spagnuolo for allegedly using confidential company information to profit $1.2 million on Polymarket bets. The case highlights growing concerns about prediction market integrity as regulators intensify scrutiny of these platforms. Spagnuolo allegedly leveraged marketing material accessed through internal Google tools to place wagers on outcomes the market considered unlikely. Between October and December, the Google employee placed $2.7 million in bets related to Google. His most lucrative wins came from correctly predicting the most searched individuals on Google in 2025. Federal prosecutors charged him with commodities fraud, wire fraud, and money laundering, carrying a potential 50-year prison sentence.
How Did Michele Spagnuolo Execute the $1.2M Betting Scheme?
Spagnuolo created an account on Polymarket under the alias “AlphaRaccoon” in May 2024. Through his role as a staff information security engineer, he accessed Google’s internal data systems, including a software tool that displayed “Google Confidential” in red text. This tool provided access to nonpublic Year in Search data before public release.
His betting strategy centered on exploiting improbable outcomes. He placed a £302.67 bet that d4vd would rank among most searched people and £3.97 that the singer would claim the top spot, despite Polymarket assigning near-zero probability to this outcome. Additionally, he wagered £486,820.15 against Pope Leo XIV being the most searched person and £397,080.06 against Donald Trump.
The trader achieved a 22-for-23 success rate on Google search predictions. His account had previously earned £119,124.02 by correctly predicting the exact release date of Google’s Gemini 3.0 Flash model[10]. According to prosecutors, Spagnuolo attempted to conceal his activities using a cryptocurrency privacy service. The AlphaRaccoon account vanished from Polymarket after users on X and Discord speculated about insider trading.
What Charges could Spagnuolo Face?
Federal authorities pursued parallel enforcement actions against the Google employee through both criminal and civil channels. On May 27, 2026, the U.S. Attorney’s Office for the Southern District of New York unsealed criminal charges. The Commodity Futures Trading Commission simultaneously filed a civil complaint in the same court.
The criminal indictment includes three counts against Spagnuolo. One count of violating the Commodity Exchange Act carries a maximum sentence of 10 years in prison. Wire fraud charges carry a maximum sentence of 20 years. The money laundering count also carries a maximum sentence of 20 years in prison. Spagnuolo appeared before U.S. Magistrate Judge Sarah Netburn in the Southern District of New York.
In the complaint, the CFTC seeks restitution, disgorgement, civil monetary penalties, trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations.
U.S. Attorney Jay Clayton stated that insider trading compromises market integrity and the American people want this greed-driven conduct investigated and prosecuted. FBI Assistant Director James C. Barnacle Jr. noted that Spagnuolo allegedly abused his elevated access to confidential trends to receive more than one million dollars in unlawful profits.
Google placed the employee on leave and confirmed cooperation with law enforcement.
How Did Authorities Trace the Insider Trading?
Blockchain transparency played a critical role in exposing the scheme. Public blockchain data revealed the wallet deposited £2.38 million into Polymarket and immediately began placing large bets. The wallet address “0xafEe” netted nearly £0.79 million by correctly predicting nearly every outcome in Google search trend markets.
Meta engineer Jeong Haeju exposed the situation on X, noting the trader achieved a 22-for-23 success rate on Google search predictions. When AlphaRaccoon attempted to hide by changing his username, the effort proved futile. All Polymarket activity is retained on-chain, allowing the trading history to remain viewable under the handle @0xafEe.
Polymarket worked closely with the US Attorney’s Office on the investigation. A spokesperson stated the company is the only prediction platform to date whose cooperation has led to insider trading charges in the United States. The platform emphasized that blockchain trading is transparent, traceable, and bad actors leave footprints.
The FBI linked Spagnuolo’s accounts by finding one he had opened with an Italian identification card. Consequently, despite using cryptocurrency from several accounts, authorities traced the transactions back to the Google employee. The US Attorney’s office worked with the Federal Bureau of Investigations on Spagnuolo’s arrest.
