On Wednesday, two brothers who played a significant role in financing the recently launched social media platform of former President Donald Trump admitted their guilt in an insider trading case.
According to federal prosecutors in New York, Michael Shvartsman and Gerald Shvartsman earned millions through their trading activities in shares of Digital World Acquisition Corporation prior to its merger with Trump Media.
Last July, authorities arrested Michael Shvartsman, 52, of Sunny Isles Beach, Florida, and Gerald Shvartsman, 45, of Aventura, Florida, on charges of securities fraud.
On Wednesday, they both admitted their guilt to a charge of securities fraud.
The defendants are set to be sentenced in July and could potentially face up to 20 years in prison. However, the prosecution has agreed to recommend a sentence of approximately three years for each of them.
According to U.S. Attorney Damian Williams, Michael and Gerald Shvartsman have confessed in court to obtaining confidential, insider knowledge regarding the impending merger between DWAC and Trump Media. They then proceeded to use this information to engage in profitable, yet unlawful, trades on the open market. Williams emphasizes that insider trading is a form of cheating, without any ambiguity.
According to prosecutors, the brothers strategically placed an associate on DWAC’s board of directors, enabling them to gain access to valuable information regarding the merger plan with Trump Media. This information was then used by the brothers to engage in illegal trading activities, resulting in a staggering $22 million in illicit profits.
Former President Trump had no knowledge of the brothers’ conduct and was not involved in the case.
Trump Media successfully completed its initial public offering and is now listed on the Nasdaq exchange.
