Three charged with insider trading in Donald Trumps Truth Social deal

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Three Florida men have been charged with insider trading in connection with Donald Trumps Truth Social media platforms deal to merge with a special purpose acquisition company, netting them nearly $23 million in illegal profits, federal prosecutors said.

Bruce Garelick, 53, of Fort Lauderdale, is an investor in Digital World Acquisition Company DWAC, +0.16%, a SPAC, or so-called blank check company, and was a member of its board in September 2021 before it merged with The Trump Media & Technology Group Corp. is made public.

Prosecutors said Garelick, who was chief strategy officer at Rocket One Capital, LLC in Miami, used his board position to funnel insider information on the impending merger to his boss, Michael Shvartsman, 52. , of Sunny Isles Beach, calling it intelligence. .

Shvartsman, a former nightclub owner who founded Rocket Capital in 2013, then allegedly passed the information on to his brother, Gerald Shvartsman, and the two began buying DWAC shares.

Prosecutors said the three men also passed insider information to friends on a trip to Las Vegas, to Michael Shvartsman’s neighbors and to Gerald Shvartsman’s employees at a furniture supply store he owned. .

Shortly after the merger deal between DWAC and Trumps group was announced in October 2021, the shares rose from just $10 to $175. Prosecutors said Garelick and the Shvartsmans quickly disposed of their shares, netting a profit of $22.9 million.

In addition to the criminal charges brought by the US Attorneys office in Manhattan, the three men were also hit with similar civil charges by the Securities and Exchange Commission.

Garelick and the Shvartsmans were arrested Thursday morning and could not immediately be reached for comment. It was not immediately clear if they still had lawyers.

In June 2022, DWAC announced in a public filing that it was under investigation by the SEC. While the merger was announced in 2021, it has not yet been finalized, as DWAC has struggled to raise money following the disclosure that it is under investigation.

Former-President Trump, who faces charges of alleged hush payments to silence women’s stories of having affairs with him and for allegedly bringing classified documents to him when he left office, was not accused of any wrongdoing in the insider-trading case. .

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