The United States Department of Justice has charged a Google software engineer with allegedly using confidential insider information to place bets on prediction market Polymarket, earning about $1.2 million in profits, according to a complaint unsealed on Wednesday.
Michele Spagnuolo, a 36-year-old Italian national, is accused of exploiting non-public information to wager on outcomes linked to Google’s most-searched list, including long-shot figures such as indie pop artist D4vd.
According to the complaint, D4vd later appeared on Google’s trending list after being arrested and accused of murdering a teenage girl.
Google’s annual search statistics, released on December 4, confirmed D4vd as the most-searched person of the year.
Prosecutors allege Spagnuolo placed a bet on November 27 predicting that D4vd would top the list, based on insider knowledge rather than public information.
The bet was especially lucrative because the markets had assigned a “near-zero probability” that D4vd would become Google’s most-searched person, according to the complaint.
Spagnuolo, using an account named “AlphaRaccoon,” is also alleged to have made additional trades based on insider knowledge of Google’s most-searched list. In October, he reportedly bet that rapper Kendrick Lamar would top the rankings at a time when internal Google data suggested he was on track to do so.
Reuters said it was unable to immediately identify an attorney representing Spagnuolo.
The complaint, filed in federal court in Manhattan, states that Spagnuolo resides in Switzerland.
In a statement, the U.S. attorney for the Southern District of New York, Jay Clayton, said prosecutors will pursue corporate insiders who misuse confidential information for profit in prediction markets.
- “Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted,” Clayton said.
