A Google engineer made $1.2 million by insider trading on Polymarket under the name 'AlphaRaccoon': DOJ

Google Engineer Charged With Using Confidential Information in Polymarket Trades, DOJ Says

A federal indictment unsealed Wednesday charges a Google software engineer with using nonpublic company information to place bets on the prediction platform Polymarket, generating more than $1.2 million in profits, according to the Department of Justice.

The defendant, identified as Michele Spagnuolo, 36, an Italian citizen residing in Switzerland, is accused of creating a Polymarket account under the username “AlphaRaccoon” in 2024. Between October and December 2024, Spagnuolo placed approximately $2.754 million in wagers on markets tied to internal Google developments, the DOJ stated in a news release.

Southern District of New York U.S. Attorney Jay Clayton said the trades relied on “confidential business information” obtained through Spagnuolo’s employment. FBI Assistant Director James C. Barnacle Jr. noted that Spagnuolo had access to “confidential trends” at the company. The indictment alleges violations of the Commodity Exchange Act, wire fraud, and money laundering statutes. If convicted, the charges carry a combined maximum penalty of 50 years in prison.

According to a LinkedIn profile associated with Spagnuolo, he worked as a staff information security engineer at Alphabet and contributed to infrastructure supporting the deployment of AI agents. The DOJ did not specify which internal projects or data points were involved in the disputed trades.

The case arrives amid growing regulatory attention to prediction markets. Platforms such as Polymarket and Kalshi permit users to wager on outcomes including elections, sports results, and corporate events. Minnesota became the first state to enact a statewide prohibition on such markets, scheduled to take effect in August. Federal lawmakers, including Sen. Adam Schiff of California and Sen. John Curtis of Utah, have introduced the “Prediction Markets Are Gambling Act,” which would impose additional restrictions.

Polymarket and Kalshi have stated that they maintain policies to limit participation by individuals who may possess material nonpublic information, including preemptive blocks on certain politicians and athletes. The DOJ release did not address the effectiveness of those measures.

Spagnuolo has not entered a plea. The indictment remains an accusation; the defendant is presumed innocent unless proven guilty in court. No trial date has been set.

The charges underscore existing federal prohibitions on trading securities or commodities on the basis of material nonpublic information obtained through employment relationships. The Commodity Exchange Act provisions cited in the case apply to certain event contracts in addition to traditional futures markets.

Additional details about the specific markets or the precise nature of the information at issue are expected to emerge as the case proceeds through the Southern District of New York.