Florida venture capitalist Michael Shvartsman and his brother Gerald Shvartsman pleaded guilty on Wednesday to participating in an insider trading scheme linked to the blockbuster deal that brought former President Donald Trump’s social media business public.
This is the best summary I could come up with:
Each of the brothers pleaded guilty in New York to one count of securities fraud, which carries a maximum sentence of 20 years in prison, according to federal prosecutors.
“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,” Damian Williams, the US Attorney for the Southern District of New York, said in a statement.
The indictment accused the brothers and a third individual, Bruce Garelick, of together making more than $22 million in October 2021 by trading on their inside knowledge of the deal.
“Insider trading is cheating, plain and simple,” Williams said, “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.”
After years of legal and regulatory delays, the Trump Media merger finally closed last week, paving the way for the Truth Social owner to go public.
Trump Media’s share price has surged, creating a financial windfall for the former president, who is the dominant shareholder.
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