Government alleges Spagnuolo traded Polymarket contracts on Google's Year in Search List
Federal prosecutors on August 14 alleged that Spagnuolo traded Polymarket event contracts tied to Google's Year in Search List. The case tests whether data controlled by a single company can constitute material nonpublic information. A legal analysis on August 15 examined how prediction markets referencing search trends and top-searched individuals blur the line between public and nonpublic information when pricing depends on proprietary data releases.
The Spagnuolo prosecution puts every prediction market trader on notice that proprietary data releases may trigger insider-trading liability, not just fair-game research. Traders on Polymarket and rival venues routinely price contracts using early-access or nonpublic feeds; the government's theory threatens that practice. The case also pressures platforms to police whether contract designers cherry-pick data sources that employees or partners can front-run.
If the court accepts that Google's search rankings are material nonpublic information, operators must screen contract references for single-source data or face secondary liability. Traders holding positions in similar search-trend, social-media, or platform-specific contracts face sudden invalidation risk if the underlying data is later deemed MNPI. The ruling will shape how prediction markets list contracts tied to proprietary rankings, viewership metrics, or algorithmic outputs controlled by one company.