US prosecutors on Thursday charged three men with insider trading ahead of the proposed merger of former President Donald Trump’s social media company and a shell company in late 2021.
Michael Shvartsman, Gerald Shvartsman and Bruce Garelick allegedly made more than $22 million trading in Digital World Acquisition, a so-called special purpose acquisition company, or SPAC, based on tips about its planned combination with Trump Media & Technology Group.
The charges were announced by US Attorney Damian Williams in Manhattan. Neither Trump nor his company was charged. DWAC did not immediately respond to requests for comment. Lawyers for the defendants could not immediately be identified.
Prosecutors said the alleged scheme began after the defendants invested in DWAC and Garelick became a director.
Garelick allegedly began providing the others with what he called “intelligence” about the status of merger talks and timing of a merger announcement.
The defendants, who live in Florida, then allegedly began buying DWAC securities and passed tips to others, and then sold them at a “significant profit” after the merger plans were announced.
Each defendant faces five to seven fraud and conspiracy charges that could lead to decades in prison.
The charges were part of four insider trading cases brought by Williams’ office against 10 people, including two charged in connection with a clinical trial for Pfizer’s COVID-19 medicine Paxlovid.
This story originally appeared on NYPost
