(29 Jun 2023)
RESTRICTION SUMMARY:
ASSOCIATED PRESS
Miami, Florida -- 29 June 2023
1. Lawyers Grant Smith and Robert Buschel leading Michael Shvartsman and Gerald Shvartsman, with faces covered, accused of insider trading
2. Various of defendant Bruce Garelick walking
3. James Lawrence King Federal Justice Building
4. Building sign
STORYLINE:
Three Florida men were charged Thursday with making more than $22 million through illegal insider trading before the public announcement that an acquisition firm was going to take former President Donald Trump's media company public.
The charges were outlined in an indictment unsealed in New York that did not in any way implicate Trump or Trump Media & Technology Group, which owns his Truth Social platform.
The charges make it less likely that Trump Media will be able to pocket the $1.3 billion promised upon completion of a merger with the acquisition firm. The merger is pending the approval of securities regulators.
According to the indictment, the men were invited to invest in the special purpose acquisition company, Digital World Acquisition Corp., and were provided confidential information that a potential target of DWAC and another acquisition company, Benessere Capital Acquisition Corp., was Trump Media.
Authorities said the defendants bought millions of dollars of DWAC securities on the open market before news of the Trump Media business was made public. After the public announcement, the men dumped their securities for a significant profit, according to the court papers.
The indictment said one of the defendants tipped off a neighbor to buy stock in DWAC, calling it a “good bet” without saying how he knew.
U.S. Attorney Damian Williams warned that insider trading “is not easy money,” calling it ”cheating."
“It's a bad bet,” Williams said in a release. "Because my Office, the Southern District of New York, is watching. And we're working quickly to investigate and prosecute anyone who corrupts our financial markets. And we'll keep at it as long as it takes. You can bet on that.”
The arrested men were identified as Michael Shvartsman, 52, of Sunny Isles Beach, Florida; his brother Gerald Shvartsman, 45, of Aventura, Florida; and Bruce Garelick, 53, of Fort Lauderdale, Florida.
All three made initial court appearances Thursday afternoon in Miami and were freed on bonds.
Two lawyers representing the Shvartsman brothers, Grant Smith and Robert Buschel, declined to comment. Garelick's lawyer, Michael Hursey, also declined to comment.
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