Zincwarrior
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- Nov 18, 2021
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Three investors were arrested for insider trading. I imagine that will end any involvement with the SPAC and Truth Social, and end Truth Social in the near term. Trump already signaled he might go back to Twitter. Its really a shocking development that a business enterprise related to the Trump family would be involved in potentially fraudulent or criminal activity. I am sure there is a good explanation for it.
Prosecutors charge three investors with insider trading in Trump SPAC deal
By Matt Egan and Kara Scannell, CNN
Updated 12:01 PM EDT, Thu June 29, 2023
Donald Trump's media company owns Truth Social. Investors seeking a merger with his company were charged with insider trading.
Drew Angerer/Getty Images
New YorkCNN —
Federal prosecutors arrested three investors on Thursday on insider trading charges related to a deal to take former President Donald Trump’s media business public.
According to the indictment, the three individuals together made more than $22 million in illegal profits in October 2021 by purchasing shares in Digital World Acquisition Corporation after secretly learning about the blank-check firm’s plan to buy Truth Social owner Trump Media & Technology Group.
The value of the securities they purchased went up sharply once the Trump deal was announced, prosecutors say. The defendants and individuals they tipped off then sold their securities for a significant profit, according to prosecutors.
The three men charged in the indictment are Michael Shvartsman, Gerald Shvartsman and Bruce Garelick, who served as a director on Digital World’s board of directors. All three have surrendered to authorities and are expected to appear in federal court in Miami later Thursday, a law enforcement official said.
The Securities and Exchange Commission also filed civil insider trading charges against the three investors.
There is no allegation that Donald Trump had any involvement at all in the alleged insider trading.
However, the new charges add to the controversy surrounding the Trump deal, which has raised eyebrows from legal experts and drawn scrutiny from regulators and prosecutors.
Nearly two years after being announced, the merger has yet to be completed and last month the Nasdaq stock exchange threatened to delist Digital World because it hadn’t filed its quarterly report.
According to the indictment, the three defendants were invited to invest in Digital World as well as another special purpose acquisition company, or SPAC.
After signing non-disclosure agreements, prosecutors say they were provided confidential information that Trump Media was a potential target of the SPACs.
Garelick was given a seat on Digital World’s board of directors, giving him further insight into the SPAC’s confidential merger plans with Trump Media.
Prosecutors say Garelick provided to his co-conspirators what he described as “intelligence” about the Trump merger negotiations and the timing of a public merger announcement.
In violation of the non-disclosure agreements they signed, the defendants bought millions of dollars of Digital World securities on the open market and shared the inside information with other associates who also purchased securities … before the merger was made public before the Trump Media merger news was made public, according to the indictment.
Digital World shares skyrocketed following the Trump Media merger news as investors saw it as a way to bet on the fortunes of the former president.
