A Google software engineer has been accused of using inside information to make more than $1 million on a prediction market.
The charges were announced Wednesday in an unsealed criminal complaint in New York that alleges Michele Spagnuolo “misappropriated confidential and valuable nonpublic information from his employer and used that information to place a series of Google-related bets on Polymarket.”
The complaint accuses Spagnuolo, a 36-year-old Italian citizen living in Switzerland, of making a series of bets from October 2025 to December 2025 tied to Google’s most-searched people of 2025. Specifically, prosecutors say he bet that Donald Trump, Pope Leo XIV, and Kanye West’s wife Bianca Censori would each not be the most searched person on Google in 2025. He also bet that the artist D4vd would land in the top five and take the number one spot.
Spagnuolo ended up profiting roughly $1.2 million from these bets, but prosecutors say he had an unfair advantage.
“Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did because he had accessed Google’s confidential, commercially valuable internal data,” the complaint alleges.
Spagnuolo is now charged with commodities fraud, wire fraud, and money laundering. The charges carry maximum sentences ranging from 10 to 20 years in prison.
Separately, the Commodity Futures Trading Commission (CFTC) has also filed a complaint against Spagnuolo, accusing him of insider trading.
“We’re working with law enforcement on their investigation. The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies. We’ve placed the employee on leave and will take the appropriate action,” a Google spokesperson told Gizmodo in an emailed statement.
For its part, Polymarket told Gizmodo that it has worked closely with the U.S. Attorney’s Office for the Southern District of New York and the CFTC. The company also pointed out that it is the only prediction platform to date whose cooperation has led to insider trading charges in the United States.
The new complaint arrives about a month after the Justice Department arrested an American soldier accused of making more than $400,000 betting on Polymarket over when Venezuelan leader Nicolás Maduro would be removed from office.
Cases like these, along with suspiciously successful wagers tied to U.S.-Iran military action, have intensified scrutiny of the obvious insider-trading risks on prediction market platforms such as Polymarket and its competitor, Kalshi.
In response to growing concerns about these markets, U.S. lawmakers have introduced legislation that would ban several types of bets on prediction market platforms, including wagers tied to “government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome.“
While both Kalshi and Polymarket prohibit insider trading, the platforms have also promoted the idea that “expert” and well-informed users can improve market accuracy by placing more informed bets.
In an apparent attempt to address the growing backlash, Polymarket announced in April a new partnership with the blockchain analytics firm Chainalysis aimed at detecting potential patterns of insider trading and market manipulation.
Meanwhile, the Trump administration seems to be backing the industry. For instance, Minnesota Gov. Tim Walz recently signed a law banning prediction markets in the state, but the CFTC has sued to block it from taking effect.
President Donald Trump, whose son serves as an adviser to both Polymarket and Kalshi, posted on Truth Social this week that it is “critically important that the CFTC’s exclusive authority over Prediction Markets is maintained, and that they will thrive.”
Read the full article here
