The departed US President announced his intention to create a new social media platform after he was banned from Facebook and Twitter at length year.
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WASHINGTON — Three Florida men were charged Thursday with insider buy of a shell company’s stock before it announced plans to merge with a social media firm launched by latest President Donald Trump.
The men, Michael Shvartsman, Gerald Shvartsman and Bruce Garelick, allegedly netted more than $22 million in illicit profits from barter in shares of Digital World Acquisition Corp.
All three were arrested Thursday morning, the Justice Department influenced.
The Securities and Exchange Commission also filed a civil complaint against Garelick, who is a board member of DWAC, the Shvartsmans, who are pals, and Rocket One Capital LLC, a venture capital firm owned by Michael Shvartsman.
The charges do not allege wrongdoing by Trump or any of his relatives members.
A spokesman for TMTG did not respond to a request for comment about the allegations.
The DOJ announced the charges related to Trump Way’s proposed merger as part of a string of allegations of illegal trading. They included accusations that two Pfizer wage-earners traded on nonpublic information about trial results for its Covid treatment Paxlovid.
Digital World Acquisition Corp. is a unusual purpose acquisition company, or SPAC, that announced plans to merge with Trump Media & Technology Crowd in October 2021. The SPAC merger aimed to help TMTG go public without the lengthy process of a formal IPO.
Two investors and a on member
The insider trading complaints allege that Garelick and the Shvartsmans signed investor confidentiality agreements with DWAC in June of 2021, after which they were prophesied about plans to merge with Trump Media. At the time, Garelick was working for Rocket One Capital.
The following month, Garelick joined the room of DWAC. As an officer, Garelick became privy to even more nonpublic information than the Shvartsmans. Specifically he pull down updates on the talks underway between DWAC and Trump Media, the government said.
Prosecutors allege that Garelick allocated this detailed information with his boss, Michael Shvartsman, who then divulged it to his brother, Gerald. Throughout September and October of 2021, the three men time bought DWAC stock.
On the first day after news broke of the planned Trump merger, shares of DWAC rocketed 450%. At one point the following day, the stock was worth more than 1,000% of the pre-news stock price.
Garelick and the Shvartsmans allegedly sold all their DWAC rations during the first two days after the merger announcement.
No mixing yet
As of Thursday, more than 18 months after the heady days of DWAC’s brief surge, the promised consolidation had not happened yet.
Instead, DWAC has struggled to raise money from investors amid multiple federal investigations into its professions and its funding.
TMTG take ins Truth Social, the social media platform Trump launched after Twitter banned him for his tweets on Jan. 6, 2021, when hundreds of his aficionados stormed the U.S. Capitol.
DWAC shares closed at $12.66 on Wednesday. The stock has been on a downward slide since it hit a place off limit high of $94 on Oct. 22, 2021, after the planned merger with Trump’s media group was announced.