The US Commodity Futures Trading Commission filed a civil enforcement complaint, and the US Attorney's Office for the Southern District of New York unsealed a criminal indictment, against Michele Spagnuolo, a Google software engineer, in 2026. The charges are commodities fraud (civil and criminal), wire fraud, and money laundering. The case arises from Spagnuolo's alleged trading on Polymarket.com using confidential, nonpublic Google internal data from at least October through December 2025. The matter is at the pre-trial stage.
The CFTC charges invoke its jurisdiction over event contracts as commodity contracts under the Commodity Exchange Act. The misappropriation theory of liability alleges that Spagnuolo accessed an internal Google software tool displaying data marked 'Google Confidential' and used that data to purchase 'Yes' or 'No' shares in at least twenty-three Polymarket event contracts linked to Google's internal Year in Search 2025 rankings, including '#1 Searched Person on Google this year' and 'Top 5 Most Searched People on Google 2025.' The wire fraud count rests on interstate wire transmissions used in the scheme. The money laundering count addresses Spagnuolo's movement of approximately $1.2 million in profits derived from approximately $2.75 million in total positions risked.
Prediction market operators offering event contracts to US persons must review their know-your-customer, anti-money-laundering, and market manipulation surveillance procedures in light of this enforcement action. Technology companies whose employees can access proprietary real-time metrics should audit internal policies on whether those employees may trade event contracts that reference the same data. The case extends the misappropriation theory of liability, previously established in US securities law, into CFTC-regulated event contract markets.
CFTC Enforcement Division Advisory (Press Release 9185-26), issued earlier in 2026, established the Commission's prediction markets enforcement posture prior to the Spagnuolo charges, signalling active anti-manipulation enforcement across event contract markets beyond this individual case. The criminal indictment remains at pre-trial stage. The outcome of any motion to dismiss challenging CFTC jurisdiction over event contracts and the application of the misappropriation theory will carry broad precedential significance. No parallel SEC enforcement action has been publicly announced.
Licentium advises prediction market operators, event contract platforms, and digital asset businesses on CFTC regulatory requirements, anti-manipulation compliance, and employee trading policy design. Work we undertake includes CFTC event contract regulation, prediction market platform compliance, anti-money-laundering advisory, insider trading risk assessment, and market manipulation surveillance design.