Feds charge three with illegal trading ahead of Trump Media merger announcement
Michael Shvartsman, Gerald Shvartsman, and Bruce Garelick allegedly "made more than $22 million dollars in illegal profits.
Astrong
The former US President announced his intention to create a new social media platform after he was banned from Facebook and Twitter last year.
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WASHINGTON — Three people have been charged with illegally trading shares in a shell company ahead of the announcement that it planned to merge with former President Donald Trump's media venture, Trump Media, the Justice Department announced Thursday.
Michael Shvartsman, Gerald Shvartsman, and Bruce Garelick allegedly "made more than $22 million dollars in illegal profits by trading in securities of Digital World Acquisition Corporation ("DWAC") based on material nonpublic information about DWAC's planned but not yet public business combination with a media company founded by former President Donald J. Trump," the DOJ said.
The Justice Department does not allege wrongdoing by Trump or any of his family members.
A spokesman for TMTG did not immediately respond to a request for comment about the allegations.
The DOJ announced the charges related to the Trump media merger as part of a string of allegations of illegal trading. They included accusations that two Pfizer employees traded on non-public information about trial results for its Covid treatment Paxlovid.
Digital World Acquisition Group is a special purpose acquisition company, or SPAC, that announced plans to merge with Trump Media & Technology Group in October 2021. The SPAC merger aimed to help TMTG go public without the lengthy process of a formal IPO.
But as of Thursday, the merger announced more than 18 months ago had not happened yet. Instead, DWAC has struggled to raise money from investors amid multiple federal investigations into its practices and its funding.
The company first revealed that it was under investigation by the Securities and Exchange Commission in a June 2022 filing. A week later, Trump's media company was subpoenaed by a grand jury in relation to the DWAC probe.
TMTG includes Truth Social, the social media platform Trump launched after Twitter banned him for his tweets on Jan. 6, 2021, when hundreds of his supporters stormed the U.S. Capitol.
DWAC shares closed at $12.66 on Wednesday. The stock has been on a downward slide since it hit an end of day high of $94 on October 22, 2021, the day after the planned merger with Trump's media group was announced.
This is a developing story, please check back for updates.
