Observed Signal · May 27, 2026 · Criminal Charges · Source: CNBC Investing · Impact: 3/5 · Sentiment: Negative
Google employee charged for $1.2M Polymarket insider trading
Federal prosecutors charged Michele Spagnuolo, a long-time Google software engineer, with insider trading after allegedly using confidential internal Google Search data to make roughly $1.2 million in profits trading on prediction market Polymarket. A complaint filed in the Southern District of New York says Spagnuolo placed bets through an account called “AlphaRaccoon” and risked over $2.7 million on wagers tied to Google’s Year in Search 2025 marketing campaign by accessing internal search data about most-searched celebrities. Polymarket says it cooperated with the U.S. Attorney’s Office and the CFTC; Polymarket and regulators’ collaboration led to the charges. Google placed the employee on leave and said it is working with law enforcement after confirming the employee accessed marketing material via an internal tool. The case follows a prior Polymarket insider-trading prosecution involving an active-duty U.S. soldier earlier in 2026.
A Google employee allegedly using internal search data for profitable trades raises platform data-governance and insider-information risks, draws regulator (CFTC/SDNY) scrutiny, and could prompt tighter internal controls — relevant to major platform trust and data-use policies.
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Key Takeaways & Evidence Grounding
- U.S. Justice Department charged Michele Spagnuolo with insider trading related to Polymarket trades.
- Spagnuolo allegedly earned about $1.2 million using confidential Google Search data and traded under the account name "AlphaRaccoon."
- He allegedly risked over $2.7 million on wagers tied to Google’s 2025 Year in Search marketing campaign after accessing internal search data.
- Polymarket cooperated with the U.S. Attorney’s Office for the Southern District of New York and the CFTC; Google placed the employee on leave.
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Google Engineer Charged Over Polymarket Insider Bets
The U.S. Department of Justice has charged a Google software engineer with using confidential internal Google data to place lucrative bets on the prediction market Polymarket. According to the indictment, the 36-year-old Italian resident in Switzerland placed $2.7 million in wagers across 25 Google-search-related outcomes and realized $1.2 million in profits. Prosecutors allege he used privileged access to Google’s internal search-ranking/marketing data to bet on outcomes— including that the musician D4vd would be the most-searched person—before results were public. Google says it is cooperating with investigators, has suspended the employee, and confirmed the activity violated company policies after the employee accessed marketing materials via an internal tool. Charges include wire/transfer fraud, money laundering and related offenses.
OpenAI Fires Employee for Insider Trading on Prediction Markets
OpenAI has fired an employee after alleging the worker used confidential OpenAI information to place trades on prediction markets such as Polymarket. The company told Wired the activity violated its policy prohibiting employees from using inside information for personal gain. The article notes prediction markets, including Polymarket and the regulated exchange Kalshi, allow wagers on real-world events and have markets about OpenAI product announcements and potential IPO timing. Kalshi recently fined and banned an editor associated with MrBeast for a separate alleged insider trading incident. OpenAI did not name the employee, and a company spokesperson emphasized the breach of internal policy. The story highlights enforcement actions and the scrutiny of prediction-market activity tied to corporate insiders.
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