Google engineer insider trading: DOJ charges employee over $1.2M Polymarket bets
DOJ charges Google engineer Michele Spagnuolo with insider trading, alleging he used confidential Search data to earn $1.2M on Polymarket; Google says it is cooperating.
Michele Spagnuolo, a longtime Google software engineer, was charged by the U.S. Justice Department in a Southern District of New York complaint accusing him of insider trading on the prediction platform Polymarket. The indictment alleges Spagnuolo used confidential Google Search marketing data to place wagers that yielded roughly $1.2 million in profits. The case highlights emerging enforcement attention on prediction markets and the use of internal corporate data for private trading.
Charges Filed by the Southern District of New York
The U.S. Attorney’s Office for the Southern District of New York brought the criminal complaint, alleging Spagnuolo traded on material nonpublic information tied to Google’s marketing campaign. Prosecutors say the trades exploited internal Google data about the most-searched celebrities connected to the company’s 2025 Year in Search report. U.S. Attorney Jay Clayton emphasized that insider trading undermines market integrity and said investigators would pursue such conduct vigorously.
Alleged Use of Confidential Google Search Data
According to the complaint, Spagnuolo accessed internal Search data and marketing materials that were not public and used that information to inform his positions on Polymarket. Prosecutors say he risked more than $2.7 million on those wagers and converted a portion of the bets into approximately $1.2 million in gains. The filing also identifies his Polymarket account handle as “AlphaRaccoon” and notes his more than a decade-long tenure at Google.
Polymarket Cooperation and Investigative Trail
Court papers and public statements indicate Polymarket cooperated with investigators, providing transactional records and blockchain traces that prosecutors used to build the case. A Polymarket spokesperson highlighted the platform’s transparency, saying, “Blockchain trading is transparent, traceable, and bad actors leave footprints.” Authorities cited that traceability as a factor in identifying and linking on-chain activity to the alleged misconduct.
Comparison to Prior Prediction-Market Enforcement
This prosecution follows at least one recent enforcement action where the Justice Department charged a U.S. service member for allegedly trading on classified operational information in a prediction market. Regulators and prosecutors have increasingly scrutinized betting platforms such as Polymarket and Kalshi for potential misuse of inside information. Legal experts say the same insider trading principles that govern securities markets can apply when the underlying information is material and nonpublic.
Google’s Statement and Employment Action
Google confirmed it is cooperating with law enforcement and said the employee accessed internal marketing materials through tools available to workers. The company described using confidential information to place bets as a serious policy breach and said it had placed the employee on leave while the matter is investigated. Google declined further comment on personnel actions but indicated it would take appropriate steps based on the outcome of the inquiry.
Legal and Market Implications
Prosecutors must prove the defendant knowingly used confidential information in breach of duties owed to his employer to secure convictions under applicable insider trading statutes. The case could set precedents for how prediction-market activity is treated when corporate insiders use protected data to place wagers. Market operators and compliance teams may face renewed pressure to detect and deter improper trading by employees with access to sensitive material.
Insiders at technology firms commonly encounter internal controls and policies meant to prevent misuse of proprietary information, and observers say enforcement actions of this kind may spur firms to tighten monitoring. Regulators also face practical questions about jurisdiction, the applicability of securities laws to prediction markets, and coordination between criminal and civil authorities.
The complaint against Spagnuolo frames the alleged conduct as a breach of trust that allowed personal enrichment at the expense of market fairness. Prosecutors and industry participants will be watching how courts address the intersection of blockchain-transparent markets and traditional insider trading doctrines.
The case is ongoing, and Spagnuolo will have the opportunity to respond to the charges in court.
