Trump Media Company Backers Plead Guilty to Insider Trading
Debarylife – On Wednesday, the two brothers who provided financial support to the now-public social media company of former President Donald Trump entered into an insider trading plea.
Federal prosecutors in New York claim that Michael and Gerald Shvartsman gained millions of trading shares of Digital World Acquisition Corporation before its merger with Trump Media.
In July of last year, two individuals from Sunny Isles Beach, Florida, Michael Shvartsman, 52, and Gerald Shvartsman, 45, were taken into custody on suspicion of securities fraud.
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They entered their pleas to one count of securities fraud on Wednesday.
Prosecutors agreed to suggest a term of approximately three years, but each of them might receive a sentence of up to twenty years in jail when they are sentenced in July.
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“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,” stated U.S. Attorney Damian Williams. “Insider trading is cheating, plain and simple.”
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In this illustration from February 21, 2022, Dado Ruvic/Reuters, FILE – PHOTO: The Truth social network logo is shown behind a lady carrying a smartphone.
The brothers allegedly put a friend on the DWAC board of directors, and that person provided them with important information regarding the Trump Media merger proposal, which the brothers subsequently traded. According to the prosecution, they made $22 million in illicit gains between them.
There was no proof that former President Trump knew of the brothers’ behavior, and he was not involved in the case.
Trump Media is currently trading on the Nasdaq exchange after going public last month.