The charges mark the second major arrest over insider trading on a prediction market.
Updated May 28, 2026, 1:22 a.m. Published May 27, 2026, 9:57 p.m. 2 min read
A Google security engineer, Michele Spagnuolo, was arrested and charged over alleged insider trading by placing bets on Polymarket about what Google users were searching, U.S. officials alleged on Wednesday.
According to a complaint unsealed by the U.S. Attorney’s Office for the Southern District of New York, Spagnuolo used “material nonpublic information” to place bets on who would appear on Google’s list of most-searched for individuals for 2025, after Polymarket began offering these markets last fall.
The CFTC filed a civil case following the Department of Justice complaint, saying it was seeking monetary disgorgement, restitution and other penalties.
Spagnuolo allegedly used an internal Google tool to track who the most-searched-for individuals were and transferred some $3.8 million in USDC to a Polymarket address, said the complaint, which was signed by FBI Special Agent Brandon Racz.
The account, which used the username “AlphaRaccoon,” bet on various contracts, such as one that D4vd (a rapper recently charged with murdering a 14-year-old girl) would be one of the most-searched for individuals in late November. Spagnuolo allegedly accessed Google’s internal tool, which showed D4vd trending, a few hours before the AlphaRaccoon account placed the bet.
The user AlphaRaccoon moved 5 million USDC.e from their Polymarket account to a wallet, before moving the funds through a swapping service and a privacy tool, the complaint said. Some of the funds were ultimately moved to an account at a payment processor in Italy, which had been opened by someone using Michele Spagnuolo’s government identification card.
“Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did because he had accessed Google’s confidential, commercially valuable internal data,” the complaint said. “Spagnuolo personally profited more than approximately $1,200,000 from his trades based on nonpublic information. Once he won, Spagnuolo then took deliberate steps to conceal his unlawful use of nonpublic information by attempting to obscure the source and ownership of his unlawful proceeds.”
Spagnuolo is being charged with commodities fraud, wire fraud and money laundering, according to the complaint.
Wednesday’s charges mark the second major arrest of someone who allegedly traded on Polymarket using insider information, following an earlier arrest of a U.S. Army soldier who allegedly bet on the Nicolas Maduro raid he was part of.
In a statement, a Google spokesperson said, “We’re working with law enforcement on their investigation. The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies. We’ve placed the employee on leave and will take the appropriate action.”
UPDATE (May 27, 2026, 22:30 UTC): Adds Google statement, additional context.
UPDATE (May 28, 2026, 01:22 UTC): Adds CFTC complaint.
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