Insider Trading Case Involving Trump Media & Technology Group Merger
Two individuals, Michael Shvartsman and Gerald Shvartsman, have pleaded guilty to insider trading charges related to the merger that took former US President Donald Trump’s media business public. The case, heard before US District Judge Lewis Liman in Manhattan, involves allegations of illicit trading based on confidential information.
Details of the Case
- Michael Shvartsman and Gerald Shvartsman admitted to one count of securities fraud.
- The trading was related to Trump Media & Technology Group’s plan to go public through a merger with a blank-check company.
- Chief investment officer Bruce Garelick of Rocket One Capital was also involved in the illegal trading.
Prosecution and Sentencing
Prosecutors claim that the defendants profited $22 million from trading Digital World securities after learning about the merger talks. US Attorney Damian Williams condemned insider trading as “cheating, plain and simple.” The sentencing for the Shvartsmans is set for July 17, with securities fraud carrying a maximum prison sentence of 20 years.
Recent Developments
Following the public listing of TMTG, its shares have been volatile. Recent financial disclosures have shown a loss of over $58 million in 2023, impacting the stock value. Despite challenges, TMTG shares closed at $48.81 on Wednesday, valuing Trump’s stake at approximately $3.8 billion.
Trump Media is facing legal disputes with co-founders Wesley Moss and Andrew Litinsky over ownership issues, further complicating the situation.
