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Two Florida Investors Plead Guilty In Trump Media Insider Trading Case

Jail Death Row Prison
View Of Hallway From Jail Cell (File)

Michael Shvartsman, a Florida venture capitalist, and his brother Gerald Shvartsman pleaded guilty on Wednesday to participating in an insider trading scam related to the blockbuster sale that took former President Donald Trump’s social media business public.

The pair were arrested in June 2023 and pled guilty today before U.S. District Judge Lewis J. Liman.

U.S. Attorney Damian Williams issued a statement saying, “Michael and Gerald Shvartsman admitted in court that they received confidential, inside information about an upcoming merger between DWAC and Trump Media and used that information to make profitable, but illegal, open-market trades. Insider trading is cheating, plain and simple, and today’s convictions should remind anyone who may be tempted to corrupt the integrity of the stock market that it will earn them a ticket to prison.”

Read: Georgia, Pennsylvania, And Michigan, Among Swing-State Voters That Trust Trump On Pivotal Issues: POLL

According to the Department of Justice, in October 2021, the brothers together made more than $22 million in illegal profits by trading in DWAC securities based on material, non-public information (“MNPI”) about DWAC’s planned, but not yet public, business combination with Trump Media, a media company founded by former President Donald J. Trump.

The pair were invited to invest in DWAC and another special purpose acquisition company (“SPAC”). After signing non-disclosure agreements, they were provided confidential information about the SPACs, including that Trump Media was a potential target. 

The defendants were prohibited by the non-disclosure agreements from disclosing the confidential information they learned or using it to buy and sell securities on the open market as a condition of receiving this information. 

After making initial investments into DWAC through the initial public offering process, through placing their associate on DWAC’s board of directors, the defendants continued to learn valuable MNPI about DWAC’s plans to merge with Trump Media, such the status of the merger negotiations and the timing of a public merger announcement.

Each pled guilty Wednesday to one count of securities fraud, which carries a maximum sentence of 20 years in prison.

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