WHAT JUST HAPPENED? A federal case unfolding in New York shows what can happen when someone with access to company secrets decides to test their luck on prediction markets. Michele Spagnuolo, a Google engineer who'd been with the firm for over a decade, allegedly used his access to internal data to place bets on Polymarket – and it worked extremely well. The 12-year veteran of Google's information security team now faces federal charges of commodities fraud, wire fraud, and money laundering.
Spagnuolo, an Italian citizen who lives in Switzerland, was arrested on Wednesday and hauled before a federal judge in New York. Prosecutors say he made roughly $1.2 million by betting on outcomes he already knew.
The scheme centered on Google's annual "Year in Search" report, which tracks the most searched topics and people. Spagnuolo had access to that data before it went public and allegedly used it to inform his trades on Polymarket, a crypto-based prediction platform where people bet on everything from election outcomes to pop culture trends.
"Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did because he had accessed Google's confidential, commercially valuable internal data," prosecutors wrote in the criminal complaint.
