The U.S. Department of Justice and the Commodity Futures Trading Commission on Wednesday simultaneously charged Google software engineer Michele Spagnuolo with insider trading. Prosecutors allege he used confidential internal company data on 2025 search popularity to place 25 bets on Polymarket, wagering $2.7 million and pocketing $1.2 million in profit.
Internal Search Data Fueled Polymarket Bets Under Account "AlphaRaccoon"
According to the DOJ announcement, Spagnuolo accessed Google's unreleased "2025 Most Searched People" ranking while employed at the company. He opened a Polymarket account named "AlphaRaccoon" and placed wagers on related prediction markets shortly before Google published its annual search report in December. The options he bet on were considered "very low probability" by the market, yet his $2.7 million stake yielded a $1.2 million gain.
Dual Actions: Criminal Charges and Civil Penalties, Maximum 50 Years
The CFTC filed a parallel civil suit seeking disgorgement of profits, civil monetary penalties, and a permanent ban on Spagnuolo from participating in prediction markets or registering with the agency. Manhattan U.S. Attorney Jay Clayton stated the case "reaffirms a decades-old rule: corporate insiders cannot use confidential business information to profit." Spagnuolo faces charges of commodities fraud, wire fraud, and money laundering. If convicted on all counts, he could be sentenced to up to 50 years in prison.
Covering Tracks: Account Renaming and Crypto Transfers
Court documents show that by December, communities on Discord and X had begun speculating that AlphaRaccoon might be a Google insider. Shortly afterward, the account name was changed to a wallet address, and funds were moved through decentralized crypto exchange services and anonymous transfer tools in an attempt to obscure the trail.
Insider Trading Wave in Prediction Markets Prompts Congressional Probe
This is not the first insider trading case involving a Google engineer. In April, the U.S. House of Representatives launched an investigation into insider trading on platforms like Polymarket and Kalshi, fearing officials and corporate insiders are using non-public information to bet for profit. CFTC Enforcement Director David Miller said, "We are the first line of police in prediction markets, and we will continue to crack down on insider trading and other fraud."
The case highlights how prediction markets are becoming a new frontier where information asymmetry can yield outsized profits—and legal consequences.