Google engineer faces US charges in $1.2 million Polymarket insider betting scandal – Firstpost

A Google software engineer has been charged by the United States Department of Justice (DOJ) for allegedly turning confidential search trend data into a $1.2 million betting windfall through prediction market platform Polymarket, according to a complaint unsealed on Wednesday.

Prosecutors allege that Michele Spagnuolo, a 36-year-old Italian citizen, exploited non-public Google search data to gain an edge in prediction market bets tied to trending online searches.

Federal prosecutors in the Southern District of New York said Spagnuolo used access to sensitive internal data to place bets on outcomes that the wider market considered highly unlikely, enabling him to generate substantial profits.

According to the complaint, one of the most lucrative wagers involved indie pop musician D4vd topping Google’s most-searched list for the year. At the time the bet was placed, prediction markets had assigned a near-zero probability to that outcome. However, prosecutors allege that Google’s internal data already showed growing search momentum around the artist.

D4vd later emerged as the most-searched person of the year in Google’s annual rankings released on December 4, validating the prediction and triggering significant payouts for those backing the outcome.

Prosecutors further alleged that Spagnuolo, who operated under the online alias “AlphaRaccoon”, placed several other bets using similar non-public information. In another example cited in the complaint, he allegedly wagered in October that rapper Kendrick Lamar would top the annual search rankings at a time when Google’s internal data purportedly showed the artist was already on track to lead the list.

The DOJ described the alleged conduct as a serious breach of market integrity, arguing that the engineer used privileged corporate information to secure an unfair advantage in emerging prediction markets.

“Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted,” Jay Clayton, US Attorney for the Southern District of New York, said in a statement.

Google said it is cooperating with law enforcement authorities and described the alleged conduct as a serious violation of company policy. The company added that Spagnuolo has been placed on leave pending further investigation.

The case adds to growing regulatory scrutiny surrounding prediction markets such as Polymarket, which allow users to wager on real-world outcomes ranging from elections to cultural trends. Earlier this year, US authorities charged a US Army soldier with using classified information to place bets related to geopolitical events, underscoring rising concerns over the misuse of sensitive data on such platforms.

According to court filings, Spagnuolo currently resides in Switzerland.