Google Engineer Accused of Insider Trading Seeks Dismissal
David Genge Published 10/09/2026
The Google engineer who is facing charges of insider trading on the prediction market site Polymarket is seeking to get those charges dismissed. Google engineer Michele Spagnuolo was arrested in May by US authorities. The charges he's facing are insider trading on Polymarket. However, his legal team has filed a motion to dismiss those charges.
Spagnuolo doesn't deny that he made money by using internal data he obtained through his position with Google. The argument that his lawyers are putting forth is that the wagers were not financial instruments subject to regulation by the United States’ Commodities Exchange Act (CEA). Instead, they claim that what he took part in was betting that isn't covered by any federal regulator.
The Google employee doesn't dispute the charges that he is facing
Spagnuolo has been placed on leave from Google. He is accused of committing commodities fraud, wire fraud, and money laundering. Under the alias “AlphaRaccoon,” he is alleged to have made several trades on the Polymarket platform. These trades resulted in Spagnuolo earning a profit in excess of $1.2 million.
According to the criminal complaint filed against him, “AlphaRaccoon” correctly wagered that the singer D4vd would be Google’s most-searched person of the year in 2025. D4vd was in the news for his suspected connection to a murder,
Sapnuolo's lawyers are arguing that prediction market event contracts are not swaps. That they are swaps is the claim being made by the Commodity Futures Trading Commission (CFTC), the federal regulator over prediction markets.
Spagnuolo's legal team is siding with state attorneys general. They are engaged in court battles to have prediction event contracts identified as betting. That would place them under the jurisdiction of state gaming authorities.
Spagnuolo's claim could hamper the future of prediction markets and the CFTC
If Spagnuolo's lawyers are successful in convincing a judge that what he did was betting, it would put another roadblock in the path of the CFTC. The federal regulator continues to insist that prediction market event contracts are swaps that fall under CEA jurisdiction.
“Spagnuolo is basically making the same argument as the states that are suing prediction markets,” financial services regulation expert Todd Phillips told Wired. “This is the issue that will likely go up to the Supreme Court.”
Spagnuolo's legal team insists that it is pure folly to portray picking out the name of the most searched person on Google as a financial instrument. They insist it is gambling, pure and simple.
The other ongoing case of prediction market insider trading involves U.S. Special Forces soldier Gannon Ken van Dyke. He's accused of trading on secure information he had access to on the U.S. invasion of Venezuela.
In that case, the CFTC filed an amicus brief claiming that Polymarket's prediction market event contracts are indeed swaps. It's expected that the CFTC will do likewise in this case.
Van Dyke’s legal team is also making an argument for dismissal of the charges on the same grounds as Spagnuolo. They insist his activity should be classified as gambling and that it should not be subject to federal commodities law.
Lawyers are also arguing that Spagnuolo did nothing to hamper Google
Spagnuolo's lawyers also argue other reasons why the charges against their client should be dismissed. They insist that the internal information he alleged to have leveraged had no commercial value to Google.
His legal team also notes that when he made these trades, Spagnuolo was living in Switzerland. He's a non-US citizen who was making trades on a Polymarket platform that was not yet legal in the US market. Based on that, his lawyers question whether the USA has any legal jurisdiction over Spagnuolo.