Two brothers who played a role in financing the now-public social media company of former President Donald Trump have admitted to engaging in insider trading.
According to federal prosecutors in New York, Michael Shvartsman and Gerald Shvartsman amassed millions of dollars 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 all admitted their guilt to a single charge of securities fraud.
When they are sentenced in July, each of them could potentially face up to 20 years in prison. However, the prosecutors have agreed to recommend a sentence of approximately three years for each individual.
According to U.S. Attorney Damian Williams, Michael and Gerald Shvartsman have confessed in court to obtaining confidential insider information regarding the merger between DWAC and Trump Media and using this information to make illegal trades in the open market. Williams stated, “Insider trading is a clear act of cheating.”
According to prosecutors, the brothers strategically positioned an associate on DWAC’s board of directors. This individual provided them with insider information regarding the merger plan involving Trump Media. Leveraging this privileged knowledge, the brothers engaged in trading activities that resulted in a substantial $22 million in illicit profits.
Former President Trump had no knowledge of the brothers’ conduct, and he was not involved in the case.
Trump Media made its debut on the Nasdaq exchange last month, becoming a publicly traded company.
