The U.S. Justice Department has charged Google engineer Michele Spagnuolo with insider trading. He allegedly made over $1.2 million by trading on Polymarket using confidential Google information.
Spagnuolo, known online as “AlphaRaccoon,” has been with Google for more than 12 years. According to Jay Clayton, the U.S. Attorney for the Southern District of New York, Spagnuolo breached his duty to the company. “Insider trading harms our markets,” he said. “People expect such greed to be investigated.”
Prediction markets, like Polymarket and Kalshi, allow users to speculate on many topics. Insider trading is strictly prohibited, but violations still occur. Recently, a U.S. Army soldier faced similar charges for using classified information about military operations to make significant profits on Polymarket.
Reports state that Spagnuolo placed bets worth over $2.7 million on Google’s upcoming marketing campaign, known as the “2025 Year in Search.” He allegedly used confidential data about popular search topics to inform his decisions.
Polymarket has been cooperating with U.S. authorities in these investigations. A spokesperson from the platform highlighted the transparency and traceability of blockchain trading, emphasizing their commitment to fair markets. “Bad actors leave footprints,” they noted.
Google responded by saying they are working with law enforcement. They acknowledged that Spagnuolo accessed marketing materials using standard employee tools but emphasized that using this data for betting is a serious violation of their policies. He has been placed on leave as the investigation continues.
In recent years, awareness and consequences for actions like insider trading have increased. A survey by the CFA Institute found that around 68% of finance professionals believe stricter regulations are needed to combat insider trading. This reflects a growing sentiment in the industry that transparency is vital for maintaining public trust.
As these events unfold, it highlights the challenges in the evolving space of prediction markets and the importance of upholding integrity in financial practices.
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