Google Software Engineer Faces Federal Charges for $1.2M Polymarket Insider Trading Scheme

Key Takeaways

• Federal prosecutors have charged Michele Spagnuolo, a software engineer at Google, with insider trading, wire fraud, and money laundering offenses
• Spagnuolo allegedly exploited access to Google’s confidential “Year in Search” rankings to make profitable Polymarket wagers using the handle “AlphaRaccoon”
• The accused wagered approximately $2.75 million on over 23 different prediction contracts, generating $1.2 million in profits
• This marks Polymarket’s second significant insider trading prosecution in 2026
• Google has cooperated with federal authorities and suspended Spagnuolo pending investigation

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Federal authorities have brought charges against a Google software engineer accused of leveraging proprietary company information to generate more than $1.2 million in profits through the Polymarket prediction platform.

Michele Spagnuolo, a 36-year-old Italian national residing in Switzerland, was taken into custody this Wednesday. The Southern District of New York’s U.S. Attorney’s Office has publicly filed criminal charges that include commodities fraud, wire fraud, and money laundering violations. Additionally, the Commodity Futures Trading Commission has initiated separate civil proceedings.

Spagnuolo held a position as a software engineer within Google’s organization. This position provided him with clearance to access internal analytics systems that contained unpublished information from Google’s yearly “Year in Search” compilation — a curated list highlighting the most-searched individuals and subjects throughout the year.

This information carries a confidential designation at Google. The technology giant considers these rankings commercially valuable because they influence advertising strategies, media narratives, and search platform user engagement.

Details of the Alleged Trading Strategy

Throughout the final quarter of 2025, from October through December, Spagnuolo allegedly exploited this privileged information to execute wagers on Polymarket contracts forecasting Google’s most-searched rankings. His trading activity occurred under the pseudonym “AlphaRaccoon.”

He deployed roughly $2.75 million across a minimum of 23 separate contracts. These transactions yielded approximately $1.2 million in returns.

Certain positions involved outcomes that market participants deemed highly improbable. According to prosecutors, FBI analysis revealed that one contract predicting musician D4vd would become the most-searched individual held “near-zero probability” according to market consensus. Despite this, Spagnuolo wagered on this outcome — and collected winnings.

Additional transactions included betting against Bianca Censori and Pope Leo XIV securing the top ranking. He also maintained lucrative positions across prediction markets involving Donald Trump, Kendrick Lamar, Jimmy Kimmel, Luigi Mangione, and Tyler Robinson.

Suspicious Trading Activity Had Been Monitored

The “AlphaRaccoon” profile had garnered scrutiny within prediction market circles well before formal charges materialized. According to crypto monitoring account Polywhaler, the trader was identified six months prior due to exceptionally high success rates.

The profile allegedly maintained a perfect 100% success rate on settled contracts and accumulated profits exceeding $1.3 million.

Following Spagnuolo’s arrest, Polymarket issued a statement on X confirming that its market integrity monitoring systems had identified the suspicious trader ahead of law enforcement action.

https://twitter.com/Polymarket/status/2059743586216800506

After funds were withdrawn from Polymarket to an external cryptocurrency wallet, the AlphaRaccoon identifier was removed from the account.

Google has verified its collaboration with federal investigators. The company stated that although Spagnuolo utilized standard internal resources accessible to numerous staff members, exploiting such data for personal financial advantage constituted a policy breach. He has been suspended from duties.

[[LINK_START_0]]According to U.S. Attorney Jay Clayton[[LINK_END_0]], the charges deliver an unambiguous warning: “Corporate insiders cannot use confidential business information to turn a profit in our markets.”

This represents Polymarket’s second insider trading case in 2026. Earlier this year, authorities charged a U.S. Army Special Forces member with utilizing classified military intelligence regarding Venezuelan President Nicolás Maduro to secure over $400,000 in profits on the same platform.

Spagnuolo has not issued any public statements regarding the allegations. The charges represent accusations, and no conviction has been secured at this time.