Lawyers for Google engineer Michele Spagnuolo have moved to dismiss insider trading charges in the US District Court for the Southern District of New York, arguing his alleged use of confidential Google data to profit over $1mn on Polymarket's international site constitutes offshore gambling, not commodities fraud. Spagnuolo, an Italian citizen living in Switzerland, allegedly used the alias "Alpha Raccoon" and Google's internal software to access confidential search data, wagering on 2025's top searched names. His legal team contends these prediction market wagers are not "swaps" regulated by the Commodity Exchange Act (CEA), as they lack financial, economic, or commercial consequence and do not facilitate hedging or price discovery.

The motion highlights the ongoing jurisdictional battle between the CFTC, chaired by Michael Selig, and over a dozen US states regarding whether prediction market event contracts are derivatives or illegal sports gambling. Spagnuolo's lawyers argue the internal information used had no commercial value to Google, only to other bettors. The case centers on whether wagering on outcomes like Google's most-searched person — whether Pope Leo XIV or Kendrick Lamar — falls under federal commodities regulation or state gambling laws.