Google Engineer Charged With Insider Trading After Making $1.2 Million on Polymarket Bets
Google engineer Michele Spagnuolo was arrested in New York on May 27, 2026, accused of using confidential Google search data to place winning bets on Polymarket under the username "AlphaRaccoon."
The US Justice Department charged Michele Spagnuolo on May 27, 2026, accusing Google’s staff information security engineer of making $1.2 million on Polymarket using confidential Google business information.
The prosecutors allege Spagnuolo knew the outcomes of his wagers before the public because he accessed Google’s commercially valuable internal data.
US Attorney Jay Clayton said Spagnuolo violated duties owed to Google and used confidential business information to generate more than $1.2 million in trading profits on Polymarket. The case marks the second federal criminal prosecution this year involving insider trading on a prediction market.
How Spagnuolo Allegedly Turned Internal Data Into $1.2 Million
As TechCrunch confirmed, Michele Spagnuolo had access to an internal Google tool containing confidential, non-public Year in Search 2025 data.
Prosecutors say he used that access to place winning trades on Polymarket, including bets that indie pop musician D4vd would become Google’s most searched person of 2025.
The DoJ complaint alleges Spagnuolo placed heavily backed wagers on November 27 while public traders assigned near-zero odds to d4vd topping the rankings.
Prosecutors also say he backed Kendrick Lamar in October, using internal trend data showing Lamar was already leading annual search rankings. Between October 15 and December 4, 2025, Spagnuolo allegedly risked $2.75 million across linked accounts.
After Google publicly released Year in Search 2025 on December 4, the AlphaRaccoon account reportedly made about $1.2 million before removing the alias from its wallet.
Spagnuolo was later released on a $2.25 million bond after appearing before US Magistrate Judge Sarah Netburn without entering a plea.
How the AlphaRaccoon Account Was Flagged and Who Caught It
The arrest did not come from inside Google.
As CNBC confirmed, Polymarket users on Discord, which rapidly implements safety features platform-wide, flagged the AlphaRaccoon account in December 2025 over its unusually accurate bets on Google-related markets and encouraged others to follow the bets.
That community scrutiny eventually contributed to the platform’s cooperation with federal prosecutors. As the DoJ press release confirmed, Polymarket worked closely with the US Attorney’s Office for the Southern District of New York throughout the investigation.
A Polymarket spokesperson stated the platform is “the only prediction platform to date whose cooperation has led to insider trading charges in the United States,” adding that since users trade with cryptocurrency, the activity is “transparent, traceable and bad actors leave footprints.”
The blockchain transaction trail, which makes prediction markets appealing to users, made Spagnuolo’s activity equally visible to federal investigators and the FBI’s New York Field Office.
Why This Case Changes How the Industry Thinks About Prediction Markets
As TechCrunch confirmed, prediction markets like Polymarket and Kalshi allow users to bet on virtually anything, but insider trading remains illegal under federal commodities and wire fraud statutes regardless of the platform’s format.
Unlike everyday users relying on transparent, legit money from digital platforms, federal prosecutors draw a strict legal boundary when online earnings stem from exploited corporate intelligence.
The DoJ’s second prediction market insider trading case of 2026, following charges against US Army soldier Gannon Ken Van Dyke, signals growing federal scrutiny of fraud tied to platforms like Polymarket.
Google confirmed it is cooperating with law enforcement and stated the employee accessed marketing materials using a tool available to all employees, confirming he has since been placed on leave.
The Spagnuolo case establishes that an unusually accurate winning streak tied to non-public information now generates criminal referrals, not just account bans.
