US prosecutors have charged Google software engineer Michele Spagnuolo, known online as “AlphaRaccoon,” with allegedly using confidential internal Google search data to profit about $1.2 million by placing bets on prediction market platform Polymarket.
According to a criminal complaint unsealed in the Southern District of New York, Spagnuolo is accused of accessing nonpublic “Year in Search 2025” data from Google’s internal systems and using that information to trade in Google-related markets on Polymarket before the results were made public.
Polymarket Insider Trading Case
Prosecutors have charged Spagnuolo with commodities fraud, wire fraud, and money laundering. The Commodity Futures Trading Commission (CFTC) filed a parallel civil complaint alleging insider trading violations under the Commodity Exchange Act. The filings note that Google treats its “Year in Search” rankings as strictly confidential because the annual campaign is commercially valuable and relies on a coordinated public reveal to generate media attention, user engagement, and advertising demand.
Investigators say Spagnuolo had access to an internal Google software tool that displayed confidential trend data and included a “Google Confidential” warning banner. Authorities allege that between October and December 2025, Spagnuolo used the AlphaRaccoon account on Polymarket to place bets on at least 23 Google-related prediction markets, including contracts tied to the “#1 Searched Person on Google this year” and “Top 5 Most Searched People on Google 2025.”
The complaint states that after reviewing Google’s internal data on October 15, 2025, Spagnuolo placed trades the next day, backing Kendrick Lamar to become the top searched person of the year while simultaneously betting against Pope Leo XIV achieving that result. Prosecutors say he continued to place trades over the following weeks using information that was not available to the public.
On November 27, 2025, investigators allege Spagnuolo again accessed confidential Google search rankings and learned that musician d4vd had overtaken Kendrick Lamar as the top trending person for the year. Roughly three hours later, the AlphaRaccoon account reportedly placed bets favoring d4vd, despite the market assigning almost no probability to that outcome at the time.
The filing states the AlphaRaccoon account risked roughly $2.75 million across Google Year in Search-related markets between October 15 and December 4, 2025. After Google publicly released its Year in Search results on December 4, prosecutors allege the account generated approximately $1.2 million in profits.
Investigators further allege that Spagnuolo attempted to conceal the origin of the proceeds by moving cryptocurrency through multiple wallets, decentralized swapping services, and a privacy-focused transfer service.
Prediction Markets Face Increased Scrutiny
The allegations against Spagnuolo arrive amid growing scrutiny of prediction markets over insider-style trading activity. In a related example, rival platform Kalshi recently banned three US political candidates after finding they placed bets tied to their own election races. Those individuals included Minnesota State Senator Matt Klein, Texas congressional candidate Ezekiel Enriquez, and Virginia Senate candidate Mark Moran.
Kalshi said the trades violated exchange rules that prohibit people with direct influence over an event from trading related contracts, and the platform issued fines and five-year bans in those cases.