Google Employee Accused of Insider Trading on Polymarket, Allegedly Earns $1.2 Million

Federal prosecutors have charged Michele Spagnuolo, a Google employee, with fraud for allegedly exploiting confidential company data to earn approximately $1.2 million (around 180 million yen) on the prediction market platform Polymarket. According to the indictment released on May 27, 2026, Spagnuolo used insider information about Google search trends to predict outcomes ahead of other traders.

Fraudulent Betting on “Year in Search 2025”

Spagnuolo targeted Google’s annual “Year in Search” report, which reveals the year’s top search trends. For 2025, Google ranked search trends based on the “growth rate of search traffic” from January 1 to November 25 of that year. This ranking method did not simply rely on raw search volume but measured unique surges in search activity, making external prediction of the results extremely difficult. According to the indictment, Spagnuolo operated under the username “AlphaRacoon” on Polymarket. He accurately predicted that singer D4vd would become “the most searched person on Google” in 2025, even though Polymarket had assigned a near-zero probability to this outcome. Spagnuolo also placed bets predicting that Pope Leo XIV and Kendrick Lamar would not make it onto the “Year in Search 2025” list—predictions that would have been challenging to make without insider knowledge of Google’s calculation methods.

Arrest and Charges Spagnuolo was arrested in

New York on May 28, 2026, but was released after posting $2.25 million in bail. He faces charges of commodities fraud, wire fraud, and money laundering. Prosecutors stated in the indictment that Spagnuolo “had access to Google’s confidential and commercially valuable internal data, which allowed him to foresee the outcomes of these bets ahead of other trading participants.” Furthermore, they highlighted Spagnuolo’s actions after profiting from these bets. The indictment alleges that he took deliberate measures to obscure the source and ownership of the illegally obtained profits, suggesting an effort to conceal his misuse of confidential information. This post-profit cover-up demonstrates the severity of the case.

A Series of Scandals at Polymarket This case

is the latest example of the escalating problem of insider trading in prediction market platforms. Recently, in April 2026, U.S. Army soldier Gannon Ken Van Dyke was charged with fraud for allegedly making $400,000 by betting on Polymarket regarding the capture of Venezuelan President Nicolás Maduro. Polymarket is a cryptocurrency-based prediction market platform that allows users to place bets on a wide range of topics, including political events, entertainment, and sports. During the 2024 U.S. presidential election, Polymarket gained significant attention for its predictions, which were more accurate than traditional polls. However, the platform’s structural vulnerabilities have been increasingly exposed in recent years.

The Battle Over Prediction Market Regulation

Concerns over insider trading have prompted several U.S. states to consider stricter regulations for prediction markets. However, the Commodity Futures Trading Commission (CFTC) and former President Donald Trump have opposed these state-level regulatory measures. The CFTC claims exclusive jurisdiction over prediction markets, leading to ongoing legal battles over regulatory authority. This ambiguity regarding jurisdiction has been cited as a factor complicating efforts to crack down on insider trading. Prediction markets operate under a distinct regulatory framework compared to traditional financial markets, and clear rules governing the use of insider information are still underdeveloped.

Questions About Tech Companies’

Data Management Practices This case raises serious questions about the internal data management practices of major tech companies. Google’s “Year in Search” report undergoes extensive data aggregation and analysis within the company before being publicly released. During this process, certain employees naturally have access to the results. Spagnuolo’s case exemplifies how an employee exploited access to confidential data for personal gain on an external platform. The extent to which Google had strengthened access logs and monitoring systems for such internal data remains unclear but will likely be revealed in the ongoing investigation. Across the tech industry, companies may need to revisit their compliance systems for handling internal data. For firms dealing with data that has direct monetary value, enhancing employee behavior monitoring and access control will become a pressing issue.

Trust Issues Cast a Shadow Over the Future of

Prediction Markets Prediction markets like Polymarket have gained attention as tools leveraging “collective wisdom” to forecast future events. However, the repeated occurrence of insider trading has shaken trust in the integrity of these platforms. For general users, the prospect of trading alongside individuals armed with insider information undermines the fairness of the market. To function as truly useful tools for information aggregation, prediction markets must eliminate insider trading and build transparent trading environments. Spagnuolo’s indictment represents a symbolic case marking the federal authorities’ serious stance against fraud in prediction markets. The future of these platforms will hinge on whether similar cases are further uncovered and how regulatory frameworks evolve in response.