For more than a decade, Michele Spagnuolo’s job at Google was to help protect the company’s information. Federal prosecutors now say it took him less than three months to turn one of Google’s most closely held secrets into a $1.2 million payday — by betting on it.
The 36-year-old staff information-security engineer was arrested this week and charged in Manhattan federal court with running an alleged insider trading scheme on the prediction market Polymarket, using confidential data about Google’s annual “Year in Search” list to place near-perfect bets on 2025’s most-searched people.
KEY FACTS AT A GLANCE
- Who: Michele Spagnuolo, 36 — Google staff information-security engineer of 12+ years, an Italian citizen living in Switzerland
- What: Charged with insider trading on Polymarket using confidential “Year in Search” data
- Polymarket handle: “AlphaRaccoon”
- The trades: ~$2.75M risked across at least 23 contracts, ~$1.2M profit (Oct–Dec 2025)
- Charges: Commodities fraud, wire fraud and money laundering, plus a parallel CFTC civil suit
- Status: Released on a $2.25M bond; has not entered a plea
How the alleged scheme unfolded
According to a complaint unsealed by the U.S. Attorney’s Office for the Southern District of New York and the FBI, Spagnuolo had access to an internal Google tool that displayed the company’s confidential “Year in Search” data — the rankings behind Google’s widely publicized annual recap of the world’s most-searched terms and people. Those results are guarded closely until Google chooses to release them, and the tool he used carried a “Google Confidential” banner.
Between October 15 and December 4, 2025, prosecutors say, Spagnuolo used that nonpublic information to trade on Polymarket under the handle “AlphaRaccoon,” buying “yes” and “no” shares on at least 23 separate “Year in Search” contracts — markets with names like “#1 Searched Person on Google this year” and “Top 5 Most Searched People on Google 2025.” In total, he allegedly risked roughly $2.75 million and walked away with about $1.2 million in profit.
“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.”
— Federal complaint, U.S. v. Spagnuolo
The bets that were too good to be true
What drew attention to “AlphaRaccoon” was not just that the account won — it was how improbably it won. Spagnuolo allegedly wagered $937,688 that model and designer Bianca Censori would not finish as the most-searched person of the year, even though the market gave her roughly an 85% chance of taking the top spot. He was right: she didn’t.
At the same time, he backed a longshot the market had all but written off — the musician d4vd — to be named Google’s number-one most-searched person. When Google published its list in December, d4vd was on top. Prosecutors say Spagnuolo also bet against high-profile names like Pope Leo XIV and President Donald Trump finishing first. The pattern of contrarian, near-perfect calls is exactly what a trader holding the answer key would produce.
Caught on the blockchain
The same transparency that prediction-market advocates celebrate is what helped expose the trades. Every Polymarket position is recorded on a public blockchain, and independent observers had already singled out “AlphaRaccoon” back in December for its suspiciously accurate bets on the search markets. Polymarket says it identified the activity and referred it to federal authorities.
“Blockchain trading is transparent, traceable, and bad actors leave footprints.”
— Polymarket spokesperson
THE DATA-ACCESS QUESTION
What Google says
- The employee accessed “marketing material” using a tool available to all employees
- Using that data to place bets was “a serious breach of our policies”
- The employee has been placed on leave pending further action
What prosecutors allege
- The “Year in Search” results were confidential, commercially valuable and nonpublic
- He knew the outcomes before the trading public did
- He profited roughly $1.2 million by trading on that edge
That distinction — between data an employee is technically allowed to open and data they are allowed to trade on — sits at the heart of the case. Prosecutors are not alleging a hack; they are alleging that Spagnuolo turned an internal preview into a private betting edge.
Insider trading’s new frontier
The case is the second high-profile prediction-market insider trading prosecution in barely a month — and the first to center on corporate, rather than government, secrets. In April, an Army Special Forces sergeant was charged with allegedly using classified information about the capture of Venezuelan leader Nicolás Maduro to make more than $400,000 on Polymarket. Regulators have separately scrutinized suspicious wagers on U.S. military action in Iran, where nine accounts reportedly cleared $2.4 million.
Taken together, the cases sketch a new template for insider trading. Instead of quietly buying a company’s stock ahead of an announcement, insiders are buying event contracts that pay out directly on the outcomes they already know — whether that is a covert military operation or a marketing list locked inside a corporate dashboard.
A reckoning for prediction markets
The political response was already building before Spagnuolo’s arrest. On May 22, the House Oversight Committee opened an investigation into Polymarket and Kalshi, sending letters to chief executives Shayne Coplan and Tarek Mansour that demand records by June 5 on how the platforms verify identities, enforce geographic restrictions, and detect trading on nonpublic information.
The Commodity Futures Trading Commission, which filed the parallel civil suit against Spagnuolo, has been steadily expanding its role policing event contracts, and lawmakers have floated legislation to ban insider trading on prediction markets outright. The episodes have reignited a fundamental debate: enthusiasts call prediction markets a “truth machine” that harnesses the wisdom of the crowd, while critics argue the same design rewards anyone who can obtain information before everyone else.
“What happens to us spiritually when every moral question just becomes a market?”
— Sen. Chris Murphy
The trust problem inside the company
Beyond the courtroom, the case lands as an uncomfortable lesson for the technology industry. Some of the most valuable nonpublic information no longer sits in a chief financial officer’s inbox; it lives in dashboards, internal tools and marketing previews that rank-and-file employees can open. The “Year in Search” data Spagnuolo allegedly exploited was, by Google’s own account, reachable through a tool available across the company.
That is a striking turn for Google, which has itself leaned into the prediction-market boom — recently moving to surface prediction-market data inside its own products. The same company whose search trends became tradable contracts now finds one of its own engineers accused of trading on them. For employers everywhere, the message is blunt: any internal fact that a public market will eventually price has quietly become a compliance risk.
Spagnuolo has not entered a plea and was released on a $2.25 million bond. He is presumed innocent unless and until proven guilty. But U.S. Attorney Jay Clayton framed the stakes in familiar terms, warning that “insider trading compromises the integrity of our markets” — a sentence that, for the first time, now applies to a bet on a pop star.
KEY TAKEAWAYS
- A Google security engineer is accused of using confidential “Year in Search” data to win about $1.2 million on Polymarket through near-perfect bets.
- The charges are serious — commodities fraud, wire fraud and money laundering, plus a parallel CFTC civil suit — signaling regulators now treat event contracts like any other market.
- It is part of a pattern — the second Polymarket insider case in a month, after a soldier’s alleged bets on the Maduro raid.
- Washington is moving fast — a House Oversight probe and proposed bans point to tighter rules for prediction markets.
- It is a corporate-ethics warning — market-moving secrets increasingly sit in everyday internal tools, not just the C-suite.
Sources
- Google Employee Charged With Insider Trading — U.S. Department of Justice, Southern District of New York
- CFTC Charges Google Employee With Insider Trading in Search Result-Related Event Contracts — U.S. Commodity Futures Trading Commission
- Complaint: Michele Spagnuolo — U.S. Commodity Futures Trading Commission
- Comer Launches Investigation Into Insider Trading on Prediction Market Platforms — U.S. House Committee on Oversight and Government Reform
