The U.S. Justice Department has filed charges against a Google software engineer accused of leveraging confidential Google search information to place wagers on the prediction market Polymarket, netting approximately $1.2 million in alleged gains, a complaint unsealed on Wednesday states.
The complaint names Michele Spagnuolo, a 36-year-old Italian citizen, as the account holder who allegedly used inside information to bet on outcomes tied to Google’s annual most-searched list. Prosecutors say Spagnuolo wagered on long-shot candidates, including indie pop musician D4vd, after internal Google data showed how public interest was evolving.
According to the filing, D4vd appeared on Google’s most-searched list following an arrest in which he was accused of murdering a teenage girl. Google statistics released on December 4 showed D4vd was the most-searched person of the year, and the complaint alleges Spagnuolo used insider information when placing a bet on November 27 that D4vd would top the list. The complaint notes the markets had assigned a near-zero probability to D4vd finishing as the most-searched individual, which made the wager particularly profitable.
Prosecutors say the accused operated on Polymarket under the account name "AlphaRaccoon" and that the use of confidential search metrics was not limited to the D4vd wager. The complaint alleges a separate October bet backing rapper Kendrick Lamar to lead the list occurred at a time when Google’s internal data indicated Lamar was on track to be the most-searched person of the year.
The complaint was filed in federal court in Manhattan. An attorney for Spagnuolo could not be immediately identified. The document also indicates Spagnuolo resides in Switzerland.
U.S. Attorney for the Southern District of New York Jay Clayton said prosecutors will pursue corporate insiders who seek to convert confidential business information into profits on prediction markets. "Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted," Clayton said.
Google confirmed it is cooperating with law enforcement and characterized the use of confidential information for placing bets as a serious violation of company policy. A Google spokesperson said the employee has been placed on leave.
The complaint comes after related enforcement activity in the prediction market space. Federal prosecutors in April charged a U.S. Army soldier with using classified information to place Polymarket bets on the capture of Venezuelan leader Nicolas Maduro, as noted in the filings referenced in the complaint.
This case centers on alleged misuse of internal search analytics to inform trading decisions on a public prediction market. The allegations, if proven, raise questions about internal controls around sensitive product metrics and the vulnerability of prediction platforms to misuse by individuals with privileged access.