A new US legal case regarding prediction market activity has been filed. Michele Spagnuolo, a Google software engineer, was charged in a criminal complaint with commodities fraud, wire fraud, and money laundering.
Internal Data Becomes a Trading Issue
According to the criminal complaint, Spagnuolo accessed Google’s non-public information in order to make trades based on Google’s official Year in Search list for 2025. The individual made use of the online pseudonym “AlphaRaccoon.”
According to the prosecutors, Spagnuolo gained access to confidential information stored in Google’s internal system because of his position at the company. This data was reportedly helpful in placing bets before Google announced the Year in Search 2025 findings on December 4, 2025.
The period during which Spagnuolo allegedly placed the trades is reported to be between October 15 and December 4, 2025. As a result of those actions, the AlphaRaccoon account allegedly risked approximately $2.75 million. The account allegedly generated about $1.2 million in profit.
CFTC Frames the Case as Market Abuse
A parallel civil action was brought by the Commodity Futures Trading Commission (CFTC) against Spagnuolo in the same court. According to the CFTC, Spagnuolo bought “Yes” or “No” shares on at least 23 2025 Year in Search contracts.
These contracts covered topics such as “#1 Searched Person on Google this year” and “Top 5 Most Searched People on Google 2025.” According to the CFTC, the trades had near-perfect accuracy.
This is particularly relevant in relation to the prediction market industry as a whole. This is not a case where the prediction made by the trader was simply an accurate guess based on publicly available data.
Instead, the regulator alleges the prediction was based on privileged inside business information not available to other market participants. This places the prediction markets in the same kind of enforcement discussion witnessed in the securities and commodity market sectors.
polymarket-faces-another-enforcement-test”>Polymarket Faces Another Enforcement Test
The incident follows another federal Polymarket-related case. In April, federal prosecutors brought charges against a US Army soldier for his involvement in a case tied to alleged classified information and Polymarket bets. The Google case shifts the focus from government information to corporate confidential data.
Google noted that it is collaborating with law enforcement in investigating the matter. The tech giant added that the alleged use of confidential information to place bets would be a serious violation of its policies. Google said it is working with law enforcement and has placed Spagnuolo on leave. Polymarket confirmed that it is cooperating with law enforcement in investigating the matter.
Wrapping Up
Prediction markets depend on fast information. That same feature creates a risk when traders know the result before the public does. For regulators, the next step is likely to focus less on whether these products are popular and more on whether platforms can detect informed trading early enough to protect market integrity.
