Polymarket faces insider trading scrutiny as Google engineer charged with fraud

Federal prosecutors allege a Google security engineer exploited confidential search trend data to win over $1.2 million on the prediction market platform.

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Add us on Google by Editorial Team May. 28, 2026

A Google information security engineer has been charged with commodities fraud, wire fraud, and money laundering after allegedly using confidential company data to place winning bets on Polymarket. The scheme reportedly netted him more than $1.2 million in profits over just three months.

Michele Spagnuolo was charged on May 27 by federal prosecutors in the Southern District of New York. He was arrested in New York and subsequently released on a $2.25 million bond.

The scheme: betting on what people Google

Spagnuolo, as a Google security engineer, had access to confidential search trend data, the kind of information that feeds into Google’s annual “Year in Search” report revealing the most-searched people, topics, and events of the year.

Polymarket is a blockchain-based prediction market where users wager real money on the outcomes of future events. Markets range from presidential elections to pop culture outcomes, and in this case, which individuals would top Google’s search rankings.

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Between October and December 2025, Spagnuolo allegedly risked more than $2.7 million on Polymarket betting on outcomes tied to Google’s 2025 most-searched individuals.

What makes the case particularly notable is the specificity of the bets. Spagnuolo didn’t just wager on obvious names. He reportedly placed high-confidence predictions on lesser-known figures like d4vd, an indie musician.

A pattern emerges for Polymarket

This isn’t the first time Polymarket has found itself at the center of an insider trading investigation. The case follows an earlier incident involving a US Army soldier, which prompted the platform to enhance its market integrity rules and enforcement mechanisms.

The CFTC has also filed a related complaint, signaling that both criminal prosecutors and civil regulators are paying attention.

This is, by all accounts, the first federal insider trading prosecution targeting a blockchain-based prediction platform.

What this means for prediction market investors

Every time someone with inside information places a large bet, they’re effectively taking money from participants who are trading on publicly available data. The person on the other side of Spagnuolo’s d4vd bet lost real money because they didn’t have access to Google’s internal search analytics.

Prediction markets on outcomes controlled or measurable by a single company, like Google search trends, are inherently more susceptible to information asymmetry. A market on “Who will win the Super Bowl” draws on widely distributed information. A market on “What will Google’s internal data show” concentrates the information advantage with Google employees.

Spagnuolo’s case is proceeding through the Southern District of New York. The combination of commodities fraud, wire fraud, and money laundering charges carries severe potential penalties.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.