The Commodity Futures Trading Commission (CFTC) has compounded enforcement actions taken against a Google employee who allegedly used privileged access to information they had about top search rankings on the site to trade related related markets on Polymarket, profiting more than $1.2 million. The CFTC announced a civil lawsuit against Michele Spagnuolo on Wednesday, adding to the criminal charges that Spagnuolo faces related to the same allegations.
If the CFTC is successful, Spagnuolo could face civil penalties, including fines and a permanent ban from trading on CFTC-regulated exchanges, on top of any criminal consequences if convicted. This is the second recent enforcement action regarding insider trading that the CFTC has announced at a time when courts in the United States have questioned the veracity of the agency’s regulation of prediction markets.
CFTC announces lawsuit tied to insider trading on markets connected to Google Search results
According to a May 27 press release, the CFTC alleges that Spagnuolo “acquired sensitive nonpublic information concerning the results of Google’s official Year in Search list for 2025.” The allegations continue that “from at least October 2025 through at least December 2025, Spagnuolo purchased ‘Yes’ or ‘No’ shares on at least twenty-three of the 2025 Year in Search List contracts on Polymarket.com, including ‘#1 Searched Person on Google this year’ and ‘Top 5 Most Searched People on Google 2025,’ with near-perfect accuracy.”
The CFTC claims that Spagnuolo’s trading resulted in profits of $1.2 million. The lawsuit filed in the Southern District of New York demands a jury trial and asks the court to compel Spagnuolo to make financial restitution plus bar Spagnuolo from trading on licensed exchanges permanently.
The CFTC statement adds that the US Attorney’s Office for the Southern District of New York has also unsealed criminal charges against Spagnuolo related to the same allegations.
A Google insider has officially been exposed on Polymarket.
— haeju.eth (@JeongHaeju) December 4, 2025
This dude just profited $1,000,000 in a single day betting on the Google search markets.
Google accidentally pushed the results early, then removed them, but not before it revealed he went 22/23 on his bets and… pic.twitter.com/44raBXoD4x
DOJ filing creates daunting prospects for Spagnuolo
A Wednesday press release from the Department of Justice (DOJ) states that charges against Spagnuolo include “commodities fraud, wire fraud, and money laundering arising from his scheme to misappropriate confidential information from his employer.” It adds that Spagnuolo, who is an Italian citizen residing in Switzerland, appeared in court at the Southern District of New York.
“Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets,” said U.S. Attorney Jay Clayton. “As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket. Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted.”
The 36-year-old used the Polymarket handle “AlphaRaccoon” according to the DOJ and could face stiff penalties if he is convicted on all counts. The maximum periods of incarceration under US law for convictions of commodities fraud, money laundering, and wire fraud add up to 50 years.
Those penalties could be levied against Spagnuolo in addition to any costs and fines he faces as a result of the CFTC’s complaint. Spagnuolo isn’t the only person who has recently faced allegations of insider trading from the US government.
Lawsuit follows Van Dyke allegations and judges’ questioning about enforcement
Late in April, the CFTC and US Dept. of Justice (DOJ) also collaborated on civil and criminal enforcement actions against Gannon Ken Van Dyke. Van Dyke used his position in the US military to improperly trade on Polymarket with privileged information, according to the allegations.
Van Dyke allegedly traded on markets related to Nicolas Maduro and Venezuela’s government. These enforcement actions against Spagnuolo and Van Dyke also come as the CFTC is under increased scrutiny in courts across the US regarding its regulation of prediction exchanges.
For example, judges on a panel at the US Fourth Circuit Court of Appeals questioned the veracity of the CFTC’s oversight during oral arguments pertaining to Kalshi’s lawsuit against Maryland authorities in early May. These enforcement actions give counsel for the CFTC and Kalshi updates to refer courts to when such questioning arises.
However, the context differs because Kalshi’s disputes with Maryland and other US states focus on the trading of event contracts connected to sporting events. Additionally, judges’ questioning has centered on platforms like Kalshi self-certifying markets rather than whether the CFTC is pursuing allegations of insider trading. The insider trading allegations in question also took place on Polymarket’s international platform that does not operate under CFTC jurisdiction.
Regardless of the timing, Spagnuolo faces compound penalties if the CFTC and the DOJ are able to substantiate their allegations in court. A short-lived profit of $1.2 million may be small compared to the costs Spagnuolo could be facing, if convicted.
