Federal regulators say a Google software engineer secretly used internal company information to place highly successful bets on Polymarket contracts tied to Google’s annual Year in Search rankings.
The Commodity Futures Trading Commission (CFTC) said Wednesday (May 27) that it filed a civil complaint in federal court in Manhattan against Michele Spagnuolo, a Swiss resident who worked at Google during the period covered in the case. According to the agency, Spagnuolo allegedly accessed confidential search ranking information before Google publicly released its 2025 Year in Search list and then used that information to trade prediction-market contracts.
The complaint says Spagnuolo “acquired sensitive nonpublic information concerning the results of Google’s official Year in Search list for 2025” through his work at Google. Regulators said he was obligated to keep that information confidential and avoid using it for personal gain.
Investigators claim he traded on at least 23 contracts connected to Google search trends between October and December 2025. The contracts reportedly included markets such as “#1 Searched Person on Google this year” and “Top 5 Most Searched People on Google 2025.”
The CFTC alleges that Spagnuolo operated under the Polymarket username “AlphaRaccoon” and consistently bought “Yes” or “No” shares with unusual accuracy. Regulators estimate the trades produced “approximately $1.2 million in profits through his trading.”
Growing scrutiny around insider trading on prediction markets
Prediction-market platforms have continued to spread into politics, sports, entertainment, and cultural events, drawing increasing attention from regulators worried about insider information and market manipulation.
Platforms like Polymarket and Kalshi allow users to buy and sell contracts based on future outcomes. Traders can wager on elections, economic reports, sports milestones, celebrity rankings, and trending search terms. Supporters argue these markets improve forecasting and public information gathering, while critics warn they create opportunities for people with privileged access to confidential data.
Industry discussions around insider trading in prediction markets have intensified over the past year. Analysts and legal experts have questioned whether existing financial-market rules fully cover betting tied to nontraditional information sources, especially when the underlying contracts involve political developments, entertainment trends, or internal company metrics.
Recent reporting on the sector has drawn concerns about how platforms detect suspicious trading activity and whether compliance systems can identify traders acting on confidential information before public disclosures occur. Some critics have argued that prediction-market operators have moved faster than regulators in introducing new event categories and higher-volume trading products.
Kalshi, another major prediction-market platform operating in the United States, recently tightened some of its rules around insider trading risks involving politicians and athletes. The company introduced updated restrictions after criticism from regulators and ethics experts who warned that individuals with direct access to nonpublic information could potentially exploit event contracts for financial gain. The platform subsequently said it had launched about 200 investigations over the past year.
Questions about insider information have also surfaced in international prediction markets. One recent controversy involved unusual trading activity tied to Venezuelan political developments and contracts related to Nicolás Maduro. Market observers pointed to large cash-outs and sharp market swings that fueled speculation about whether some traders possessed information unavailable to the broader public.
Regulators have increasingly signaled that prediction markets will face scrutiny similar to more traditional financial products when authorities believe confidential information may have influenced trading outcomes.
CFTC puts pressure on Polymarket as Google employee investigated
The CFTC said its lawsuit seeks restitution, disgorgement of profits, civil monetary penalties, trading bans, registration bans, and a permanent injunction preventing future violations of the Commodity Exchange Act and agency rules.
“As I have said repeatedly, the Commission will not tolerate fraud, manipulation, or insider trading, regardless of the technology or platform that is used,” said Chairman Michael S. Selig. “Today’s action further underscores our commitment to rooting out insider trading and promoting market integrity in prediction markets.”
Director of Enforcement David I. Miller said workers with access to confidential business information cannot legally use that information for personal financial benefit.
“Employees who are entrusted with confidential business information cannot misappropriate that information for personal financial gain,” Miller said. “As this and other enforcement actions show, the Division is a cop on the beat in policing the illegal use of inside information in the prediction markets and other markets within the CFTC’s jurisdiction. We will continue to take action to protect markets from insider trading and other forms of fraud, abuse, and manipulation.”
The complaint states that Spagnuolo worked as a software engineer at Google during what regulators described as the “Relevant Period.” Investigators allege his position gave him early access to internal search ranking data before the company publicly published its annual Year in Search results.
The civil action was filed in the U.S. District Court for the Southern District of New York.
Federal prosecutors in Manhattan also announced Wednesday that a related criminal complaint against Spagnuolo had been unsealed in the same court. According to the CFTC, the criminal allegations involve conduct similar to the claims described in the civil case.
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