June 29 (UPI) — Three Florida men who helped fund Donald Trump’s social media company have been charged with insider trading of a shell company.
Michael Shvartsman, Gerald Shvartsman and Bruce Garelick allegedly netted more than $22 million in illicit profits from trading shares of Digital World Acquisition Corp. before it announced plans to merge with Donald Trump’s Truth Social.
All three were arrested on Thursday morning, according to the Justice Department.
Digital World Acquisition Group is a SPAC, or special acquisition company, which was created to facilitate a merger with Trump Media and Technology Group, the company that runs Truth Social.
Prosecutors said that Garelick was give a seat on Digital World Acquisition Group’s board, which allowed him to access information not available to the public. He then provided that information to the Shvartsman, who are brothers and millions of shares before the news of the merger became public.
“Insider trading is not a quick buck,” U.S. Attorney Damian Williams said in a statement. “It’s not easy money. It’s not a sure thing. It’s cheating. It’s a bad bet. It’s a ticket to prison.”
The Securities and Exchange Commission also filed a civil complaint against the three, and Rocket One Capital LLC, a venture capital firm owned by Michael Shvartsman.
DWAC first revealed that it was under investigation by the SEC in a June 2022 filing.