Google Engineer Faces Prison Over $1.2 Million Insider Trading Scheme

A decade-long career at Google ended in federal charges after software engineer Michele Spagnuolo allegedly funneled confidential corporate data into Polymarket bets. Prosecutors claim the Italian citizen used his insider access to exploit unreleased search trends, netting over $1.2 million in illicit trading profits before his recent arrest.

Operating under the pseudonym "AlphaRaccoon," Spagnuolo allegedly leveraged "Google Confidential" data regarding the company's annual "Year in Search" report. The Department of Justice complaint details how he placed multiple wagers between October and December 2025, specifically targeting the top five most-searched individuals. Because he accessed these rankings before their public release on December 4, he held a significant, unfair advantage over other market participants.

U.S. Attorney Jay Clayton emphasized that corporate insiders cannot treat confidential business intelligence as a personal windfall. The charges against Spagnuolo include wire fraud, money laundering, and violations of the Commodity Exchange Act. With each count carrying potential prison sentences of up to 20 years, the case signals a hardening stance from federal regulators toward the intersection of prediction markets and corporate malfeasance. This marks the second time in recent weeks the DOJ has targeted insider trading on Polymarket, following a similar case involving a U.S. Army soldier.