DOJ Charges Google Employee With $1.2 Million Polymarket Bet On Search Term (cnbc.com) 41
An anonymous reader quotes a report from CNBC: Federal prosecutors charged a Google employee with fraud on Wednesday, alleging that he made $1.2 million off of bets using insider information on Polymarket. Prosecutors claim that Michele Spagnuolo, a staff information security engineer at Google, used confidential information to place trades correctly betting that singer d4vd would be Google's most searched person in 2025. Spagnuolo has been charged with money laundering, commodities fraud and wire fraud. The complaint, filed in the Southern District of New York, was unsealed on Wednesday.
Spagnuolo was arrested Wednesday morning in New York, ABC reported. "Spagnuolo had access to Google's internal data systems, including a particular Google internal software tool that provided him access to confidential, nonpublic Year in Search data," the prosecutors said in their complaint. Some observers of the Polymarket platform flagged the user "AlphaRaccoon" back in December for suspicious trades on the most searched person contracts. The complaint Wednesday said that Spagnuolo was the person behind that account. "Google officially and publicly announced its Year in Search 2025 results on or about December 4, 2025. Soon after it did so, Spagnuolo's AlphaRaccoon account, profited approximately $1.2 million on his Google Year in Search 2025-related bets," the complaint said.
[...] Spagnuolo is also facing a civil case from the Commodity Futures Trading Commission, where he's charged with insider trading. The complaint detailed that Spagnuolo correctly predicted the outcomes of a slew of other search markets, including contracts like "Will Zohran Mamdani rank in the Top 5 most searched" and "Will Squid Game be the #1 searched TV show." "Spagnuolo misappropriated the material Confidential Information by knowingly or recklessly using it to trade the 2025 Year in Search List Contracts in breach of his duties of trust and confidentiality," the CFTC complaint alleged.
Spagnuolo was arrested Wednesday morning in New York, ABC reported. "Spagnuolo had access to Google's internal data systems, including a particular Google internal software tool that provided him access to confidential, nonpublic Year in Search data," the prosecutors said in their complaint. Some observers of the Polymarket platform flagged the user "AlphaRaccoon" back in December for suspicious trades on the most searched person contracts. The complaint Wednesday said that Spagnuolo was the person behind that account. "Google officially and publicly announced its Year in Search 2025 results on or about December 4, 2025. Soon after it did so, Spagnuolo's AlphaRaccoon account, profited approximately $1.2 million on his Google Year in Search 2025-related bets," the complaint said.
[...] Spagnuolo is also facing a civil case from the Commodity Futures Trading Commission, where he's charged with insider trading. The complaint detailed that Spagnuolo correctly predicted the outcomes of a slew of other search markets, including contracts like "Will Zohran Mamdani rank in the Top 5 most searched" and "Will Squid Game be the #1 searched TV show." "Spagnuolo misappropriated the material Confidential Information by knowingly or recklessly using it to trade the 2025 Year in Search List Contracts in breach of his duties of trust and confidentiality," the CFTC complaint alleged.
How about they go after friends of Trump? (Score:5, Insightful)
How much money was "won" by friends of Donald Trump who bet on when Trump would do this or that? How about those who conveniently timed stock trades perfectly with announcements by Trump that would cause the overall stock market to go up or down?
Now, bets on who would be the most searched for...when was the bet placed, just before the information came out, or a year ago where it would require search/advertisement manipulation to have working at Google provide any sort of extra tip information where it would be against the rules?
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Answer non of that matters. Almost all of those laws do not apply to the president, other federal employees, and in some cases legislators yes but the president largely is except for law that would prohibit him from trading based on his knowledge of confidential information.
He IS obligated by his oath of office to act in the interests of the United States, but he can profit from that as far as the law goes mostly.
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*cough* Alexander Smirnov is a former FBI informant of Ukrainian origin and Israeli nationality who pled guilty to lying to federal agents at the Federal Bureau of Investigation, and creating false records. Alexander Smirnov's admitted lies began the Biden–Ukraine conspiracy theory.
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Almost all of those laws do not apply to the president, other federal employees, and in some cases legislators yes but the president largely is except for law that would prohibit him from trading based on his knowledge of confidential information.
This is because every previous president was too honorable to do so, so no one thought it necessary to include the presidency in those laws.
Sadly, the current occupant of the White House is utterly lacking in any form of honor or even basic human decency. As Americans, we should all feel deeply ashamed.
Re: How about they go after friends of Trump? (Score:3)
It is not only the Supreme Court recent rulings. Even before, it was also DOJ policy, which is not law, and at the discretion of the executive branch. Not surprisingly, no matter who is in charge, they enjoy exempting themselves from prosecution.
Huh ? (Score:4, Insightful)
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IIRC, he's mostly famous because a dead girl was found in his trunk.
What? (Score:5, Insightful)
I thought "criminal" was the new "legal" as far as the DIJ was concerned? Did this person do something to piss off the Dumb?
Re:What? (Score:5, Informative)
Re:What? (Score:4, Informative)
Got one! (Score:2)
Looks like they caught one of the hundreds of thousands of people that must be doing this same sort of thing. Most of the others just aren't making quite that much money doing it.
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Sad state of events (Score:4, Insightful)
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This is why gambling is illegal. (Score:3)
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It's an overseas market too.
Lots of defects in the case.
Somebody said his legal defense is that if Congress can do it he can. If true it could be an impactful case.
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Somebody said his legal defense is that if Congress can do it he can.
Someone needs to not comment on the law then. The actual US statues have many carveouts for members of congress, and also a whole separate section of insider trading law that exclusively applies to members of congress (See STOCK Act).
It's gonna be fun (Score:2, Interesting)
The court's pretty corrupt though so it'll be fun to see how it plays out, in a "our civilization is collapsing" kinda way
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On the contrary, this is exactly within the legal definition of insider trading. Polymarket is legally not considered gambling, it is commodity trading. The fact that this is a silly classification matters not at all to the legal situation.
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I don't give a fuck what the law calls it. There are no commodities involved. It's gambling. Anyone who thinks it isn't gambling is certifiably retarded.
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Of course if those aren't securities, then the entire site is illegal as it's operating as a securities exchange. That's their legal argument for why they aren't gambling sites, and shouldn't be regulated by state gaming commissions. So expect the full might of all those prediction market sites to be lining up against that argument and for finding him guilty.
Burn it down (Score:1)
I can't wait for more liar CEOs to get Luigi'd.
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Hey look over there, people in the country illegally!
Hey look over there, gay people!
Hey look over there, (fill in the blank)
Seal Complaint and facts (Score:4, Informative)
Here is the official sealed statement signed by Judge detailing the particulars of the crime.
https://www.justice.gov/usao-s... [justice.gov]
Polymarket bets are commodities. Inside trading of commodities is illegal.
Michele Spagnuolo was clearly well aware his actions were criminal, as the court document details his efforts to hide identity and obscure the financial transactions through use of ethereum, USDC, and crypto-swapping services, as well as deleting accounts after online speculation that the gains were the result of insider activity.
He has brought shame on the Google Security team, though it appears Google's Security Team did assist in identifying him and assisting the investigation.
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Polymarket bets are commodities.
Hmm. Perhaps to the CFTC they are. But I'd like to see someone take delivery of a bet as one can do with a barrel of oil or bushel of wheat.
Commodities are usually fungible goods. Such that an option or futures contract on one instance (barrel of oil) is interchangeable with any other. Bets are like unique contracts. Payment (or non payment) based upon the terms of that one contact. You can't really compare a search on D4vd with one for Sydney Sweeney (thank goodness).
That's one (of many) reasons we got i
This will be interesting for precedent (Score:2)
I'm not sure I understand the criminal charges. He's not trading securities.
I'm sure he violated internal Google policies and there are consequences for that. But isn't the entire point of prediction markets that people with insider knowledge help create a more efficient... prediction market?
This will be interesting.
Re:This will be interesting for precedent (Score:4, Informative)
Polymarkets are commodities.
Insider trading on Polymarket and similar prediction markets is illegal. The Commodity Futures Trading Commission (CFTC) considers prediction markets to be commodities markets, meaning traders are subject to federal commodities fraud and anti-manipulation laws.
Trading based on material nonpublic information can lead to severe civil and criminal penalties - Michele is facing 10 years for insider trading, 20 for money laundering (crypto-swapping to hide source and profits), and 20 years for destruction of evidence to hide major financial crimes.
Underdog (Score:2)
Come on, she's a mere millionaire. Now she's got to waste all that hard-earned money on lawyers.
There ain't no justice, I tells ya...
Re: Underdog (Score:2)
She is a he.
Waste of government money (Score:2)