Miami, Florida – Two brothers from Florida, Michael Shvartsman, 53, and Gerald Shvartsman, 46, have pleaded guilty in federal court for their involvement in a $22 million insider trading scheme linked to the company that took former President Trump’s social media venture public.
The brothers admitted to one count of securities fraud each, facing a maximum sentence of 20 years in prison. The sentencing hearing for the brothers is scheduled for July 17, as decided by U.S. District Judge Lewis Liman.
The allegations against the brothers involve the illegal trading of nonpublic information in October 2021 related to Digital World Acquisition Corp. (DWAC) acquiring Trump Media & Technology Group, the parent company of Truth Social social media network.
According to the Department of Justice, the brothers allegedly acquired confidential details about the merger, including its announcement timeline, and proceeded to purchase millions of dollars’ worth of DWAC securities before the merger with Trump Media was made public.
U.S. Attorney Damian Williams emphasized the seriousness of insider trading, stating that it undermines the integrity of the stock market and results in legal consequences. The attorney expressed that the convictions of the Shvartsman brothers should serve as a warning to those considering engaging in such illegal activities.
Last June, the Shvartsman brothers were arrested alongside another individual, Bruce Garelick, who had connections to Michael Shvartsman’s venture firm, Rocket One Capital. Bruce Garelick, a member of DWAC’s board of directors, is accused of sharing crucial information with the brothers regarding the anticipated deal in 2021 and is set to face trial later this month.
Representatives for Michael Shvartsman declined to provide comments, while attorneys for Gerald Shvartsman and Bruce Garelick did not immediately respond to requests for statements.
The case continues to unfold as legal proceedings progress, emphasizing the severe consequences of insider trading and the importance of upholding ethical standards in financial markets.