Two investors in Trump Media insider trading scheme plead guilty

Two investors connected to an insider trading scheme regarding the merger of Digital World Acquisition Corporation (DWAC) with Trump Media & Technology Group have pled guilty to securities fraud in connection to the scheme.

On Wednesday, brothers Michael Shvartsman and Gerald Shvartsman each pled guilty to one count of securities fraud in New York City.

Their guilty pleas come approximately 10 months after they were arrested and charged with trading in securities of DWAC based on material, non-public information about the merger between DWAC and Trump Media – a media company founded by former president Donald Trump.

Prosecutors say both men made more than $22 million in illegal profits.

Initially, the two brothers pled not guilty to the securities fraud charges and were expected to head to trial later this month but changed their minds.

Gerald Shvartsman walks following a hearing at the Manhattan Federal Court, in New York City, U.S. July 20, 2023.

According to federal prosecutors, both men were invited to invest in DWAC and another special purpose acquisition company and then, after signing non-disclosure agreements, were provided confidential information about the shell company.

As a condition of the non-disclosure agreement, they were prohibited from using the confidential information to buy or sell securities on the open market.

After making initial investments into DWAC through the initial public offering process, a third individual who is also indicted and set to go to trial, Bruce Garelick, was given a seat on the board of directors and provided the brothers with valuable non-public information about the planned merger.

Prosecutors say Michael and Gerald Shvartsman bought millions of dollars of DWAC Securities