Google engineer charged in alleged $1.2mn Polymarket insider trading scheme

Betting on Polymarket is supposed to be a fun, low-intensity gamble whereby you buy 'yes' or 'no' shares for the outcome of a real-world event and hope to correctly predict how it resolves -- at which point your winning share pays out $1 and your losing one pays nothing.

That is, unless you are an employee at Google and federal prosecutors allege you already know the answers -- in which case it could amount to insider trading, one of the most aggressively prosecuted white-collar offences on the books that can carry a maximum prison sentence of 20 years.

According to the US Attorney for the Southern District of New York, Michele Spagnuolo, a staff software engineer at Google, allegedly used his employer's most confidential annual trend data compilation to pocket more than $1.2 million (€1.1mn) on Polymarket. His alias was known as "AlphaRaccoon."

Spagnuolo has now been charged with commodities fraud, wire fraud and money laundering by federal prosecutors in New York.

The Spagnuolo case is the second high-profile prosecution for insider trading on a prediction market in just over a month, part of a largely unexplored legal frontier as prosecutors grapple with how existing fraud and commodities law applies to platforms like Polymarket, which operate nothing like a traditional stock exchange.

How Google's 'Year in Search' became a trading tip

Every December, Google publishes its "Year in Search" -- a splashy, carefully choreographed reveal of the year's top trending searches. It drives traffic, generates significant media coverage and, as the filing notes, serves as a "high-profile vehicle" through which Google demonstrates its reach to advertisers.

The whole point, commercially speaking, is the surprise. Google guards the underlying data closely and even internally, access is restricted to a limited number of employees.

Spagnuolo, who has worked at Google since around 2014, allegedly had access to an internal software tool bearing a banner reading "Google Confidential" that gave him sight of the Year in Search results before anyone outside the company did.

Enter AlphaRaccoon

On the prediction market platform Polymarket, users can bet on the outcome of real-world events such as elections, sports results, and cultural moments using cryptocurrency. In October 2025, Polymarket began offering markets on who would be Google's most-searched person of the year.

Around the same time, a Polymarket account called "AlphaRaccoon" started placing bets.

Between October and December 2025, FBI Special Agent Brandon Racz alleges, Spagnuolo accessed Google's confidential Year in Search data and then, sometimes within hours, placed wagers on Polymarket that reflected exactly what he had seen.