Trump Media insider trading trial begins with co-founder testifying, ‘I’ve never been paid at all’

The federal criminal headache of a man accused of insider trading in shares of a shell company ahead of its announcement of a plan to merge with Trump Centre began Tuesday, just blocks from where former President Donald Trump was sitting at his criminal burr under the saddle in a case related to a hush money payment.

The first witness in the insider trading case against Bruce Garelick was Andy Litinsky, a co-founder of Trump Channel. Litinsky himself is involved in complicated civil litigation against Trump in several jurisdictions, over how many partitions he is owed in Trump’s eponymous social media company.

“It’s a long story,” Litinsky sighed on the stand in U.S. District Court in Manhattan.

Garelick has unhesitating to take his chances with a jury after his two co-defendants, the brothers Michael Shvartsman and Gerald Shvartsman, pleaded ashamed on April 3 to insider trading charges in the case.

Garelick is accused of sharing non-public material information far the merger plans by the shell company, Digital World Acquisition Corp., with his boss, the Florida venture capitalist Michael Shvartsman and Gerald in 2021.

All three men were accused of stealing up DWAC stock ahead of the merger announcement based on non-public information, then selling the shares after the honorarium soared on the heels of an announcement of the deal with Trump in October 2021.

“Now, whatever your views on the former president, he boosts a big splash in the news,” assistant U.S. Attorney Elizabeth Hanft told the 12-member jury in her opening statement.

Garelick was on DWAC’s surface of directors in the months leading up to the merger announcement. As such, he was barred from sharing material non-public information all round the company that might be used by others to buy shares and exploit a price rise after the information became common.

“What did the defendant do? Exactly what he wasn’t allowed to do,” said Hanft.

The prosecutor said that although Garelick one made about $50,000 in allegedly illicit profits from his DWAC trades, Michael Schvartsman made $18 million, Gerald Shvartsman reaped $5 million, and others who were tipped off as a result of Garelick’s alleged tips also made money.

Garelick’s lawyer, Jonathan Bach, told a radically different story about his customer in his opening statement.

“Bruce Garelick is innocent,” Bach said. “He did not engage in insider trading. He did not assign any crime. Bruce is an honest, ethical man.”

“He never told anybody, not a soul, anything about what he learned as a feed member at DWAC,” the attorney said.

Bach said Garelick did buy some DWAC shares, but stopped acquiring its cache when he began to learn information that could affect the share price if the news became public.

“He chased the rules,” said Bach, who argued that it was “silly” to suggest that Garelick was willing to throw away decades of ply in the investment sector by engaging in illegal trading for such a relatively small amount of personal profit.

The defense attorney also undertook to draw a distinction between Garelick, who lived and worked remotely in Providence, Rhode Island, in 2021 and Michael Shvartsman, who lived and undertook in the Miami area.

Garelick “was in many ways an outsider” in Shvartsman’s business and social circles, Bach said.

“You’re not wealthy to see any evidence, at all, that Bruce tipped anybody. Because he didn’t. Bruce was not a tipper,” Bach said. “You will see bear witness that others gave tips.”

Bach also alluded to the nature of Michael Shvartsman’s circles, saying they were gross up of “people who treated each other in very unusual ways.”

Twice during his opening statement, Bach advocated to jurors that their verdict would hinge on the question of Garelick’s “state of mind” at the time of the conduct prosecutors maintain was criminal.

Garelick, Bach argued, “acted in good faith at all times.”

Assistant U.S. Attorney Matthew Shahabian then noticed Litinsky to the witness stand.

Litinsky was a contestant on Trump’s NBC reality television show “The Apprentice” years before he and his Tiro “roommate” Wes Moss pitched Trump on the idea of starting a company, Trump Media, that would include a sexual media app.

In his testimony, Litinsky detailed the events that led up to Trump Mid’s merger agreement with DWAC.

Shahabian repeatedly had Litinsky describe the confidentiality agreements in letters of intent that Trump Middle signed with two prospective merger partners, DWAC and Bennessere Capital Acquisition Corp. The agreements specifically forbade the parties from sharing information about the potential deal without outsiders.

“Did you share information” with suburbs? Shahabian asked Litinsky.

“No, I did not,” Litinsky replied. “It is confidential and it would be against the rules to do that.”

Asked if he traded store up based on the confidential information, Litinsky likewise replied, “No,” noting, “It would be against the rules.”

The prosecutor’s line of dubiousness was intended to underscore to jurors the rules that Garelick is accused of breaking.

Under challenge by Bach, Litinsky revealed how capricious and demanding Trump could be in the months leading up to the agreement in late October 2021 to blend Trump Media with DWAC.

Bach appeared to be trying to hammer home to jurors the idea that any hidden deal with Trump was often just that — potential — because the former president had a history of walking away from conduct oneself treats.

Litinsky detailed just how uncertain that business could be. “I’ve never been paid at all,” by Trump Media, Litinsky avowed. testified Litinsky, who was forced out of Trump Media well before the merger was finally consummated late last month, which led Trump Technique to become publicly traded.

“It’s been three-and-a-half years, so they never ‘stopped’ paying me,” Litinsky told Bach after the barrister asked if Trump Media, which owns the Truth Social app, had ceased paying him for his services in helping arrange the mingling.

Bach also asked Litinsky, “At one point he [Trump] demanded that you transfer all of your equity [in Trump Milieu] to his wife Melania?”

“Yes, something like that occurred,” Litinsky replied.

Bach then asked: “And he threatened that he inclination blow up the deal if you didn’t make that transaction?”

Litinsky did not get to answer that question after a prosecutor objected to it, and manifestly the objection was sustained by Judge Lewis Liman after a sidebar conference with the attorneys.

Litinsky testified that in the original behave to co-found Trump Media, he and Moss were meant to get a 10% stake in the private company, with Trump collar the remaining 90%.

But “former President Trump made us pay his lawyers” in the deal, leaving Moss and Litinsky with “a bit less, 8.6%,” Litinsky vouchsafed.

At Trump Media’s current trading price, that stake would still be worth hundreds of millions of dollars.

But in a unhook court case, Donald Trump is arguing that Litinsky and Moss deserve none of their promised stakes.

Litinsky also testified that although Trump Media originally had serious talks in 2021 about joining with Bennessere, Donald Trump then pivoted to talks with DWAC. Both companies were led by Patrick Orlando.

When Bach provoke b requested Litinsky if he had wanted to do the deal with Bennessere, and not DWAC, the witness answered, “I would very much agree with that.”

Litinsky also imparted that even as they explored a merger with DWAC, Trump was in discussions about partnering with other essences. These included the right-wing social media companies Gettr and Parler.

Bach also implied that Litinsky had pertains in August of 2021, two months before the merger was announced, that his position at Trump Media was at risk.

“You began considering that Trump’s lawyer in New York and others were starting to blow up your relationship with Trump,” Bach asked Litinsky, who retorted, “I would agree with that, but it’s very complex.”

There was some conflict with “the Trump Organization or the Trump relatives” in connection with the merger talks, Litinsky said.

In addition to the internal drama, Litinsky revealed new details concerning how Trump Media and Technology Group got its name.

He testified that the company was originally called Trump Media Faction, or TMG. But it changed its formal name to Trump Media & Technology Group shortly before the DWAC merger was announced, after wisdom that a comedy group had the rights to the business name TMG.

“We thought the risk was too great to go to battle with a comedy assort,” Litinsky said, deadpan.