According to an indictment unsealed Wednesday, the U.S. Department of Justice has charged a Google software engineer with using confidential information to manipulate bets on the prediction market Polymarket related to Google's annual search trends, allegedly profiting $1.2 million.
The indictment, as stated, alleges that 36-year-old Italian citizen Michele Spagnuolo used insider information to place bets on long-shot candidates, such as independent musician D4vd. D4vd's name appeared on Google's annual search list after he was arrested and charged with the murder of a teenager.
Google's statistics released on December 4 showed D4vd as the most-searched person of the year. Spagnuolo is accused of using insider information when placing a bet on November 27, wagering that D4vd would top the list.
The indictment states this bet was particularly profitable because the market considered the probability of D4vd becoming Google's most-searched person to be "close to zero."
The charging document further alleges that Spagnuolo, using an account named "AlphaRaccoon," made other bets on Google's annual search list using non-public information. In October, he allegedly placed a bet that rapper Kendrick Lamar would top the list, at a time when Google's internal data indicated Lamar was on track to be the year's most-searched person.
Federal prosecutors for the Southern District of New York stated in a release that they will pursue corporate insiders who attempt to profit from trade secrets in prediction markets.
Google stated in a release that it is cooperating with law enforcement and that using confidential information for betting is a serious violation of company policy. A Google spokesperson confirmed that Spagnuolo has been suspended.
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