Barbados Times

Barbados, Caribbean & World News
Thursday, Oct 31, 2024

Donald Trump's media company owns Truth Social. Investors seeking a merger with his company were charged with insider trading.

Prosecutors charge three investors with insider trading in Trump SPAC deal

Authorities arrest three investors for alleged insider trading ahead of Trump’s media company going public; The indictment reveals illicit profits exceeding $22 million.*
On Thursday, federal prosecutors arrested three investors on charges of insider trading in connection with a deal involving Digital World Acquisition Corporation's (DWAC) intended acquisition of Trump Media & Technology Group, the media venture of former President Donald Trump. The arrests signify an intensifying scrutiny of the controversial merger and shed light on how insider information can be exploited for substantial financial gain.

The trio, identified as Michael Shvartsman, Gerald Shvartsman, and Bruce Garelick, is accused of trading on confidential information related to DWAC's undisclosed plan to purchase Truth Social owner Trump Media & Technology Group in October 2021. According to the indictment, the three individuals capitalized on this insider knowledge to amass over $22 million.

Insider Trading Web Unravels
The indictment unveils an intricate web of insider trading wherein the defendants not only traded on nonpublic information but also allegedly relayed this sensitive information to friends, neighbors, and colleagues. These contacts, in turn, acquired securities in Digital World ahead of the public announcement regarding DWAC's deal with Trump Media. Following the announcement, the securities experienced a sharp increase in value, and the defendants, along with the individuals they had tipped off, sold their securities for a substantial profit.

Bruce Garelick's position as a director on Digital World’s board of directors is alleged to have granted him deeper access to DWAC's confidential merger plans with Trump Media. Prosecutors accuse Garelick of sharing what he characterized as “intelligence” regarding the merger negotiations and the timing of the public announcement with his co-defendants.

In total, those in the defendants’ circle purchased tens of thousands of securities in anticipation of the merger announcement. This insider ring was allegedly mobilized during a trip to Las Vegas, and involved Michael Shvartsman’s neighbors and Gerald Shvartsman’s employees at a furniture supply store.

SEC Files Civil Charges
In addition to the federal prosecution, the Securities and Exchange Commission (SEC) filed civil insider trading charges against the trio. Gurbir Grewal, director of the SEC’s Division of Enforcement, emphasized the SEC’s commitment in a statement saying, “Rather than adhere to his duty as an insider, we allege that Garelick, together with the Shvartsmans, monetized that information to generate over $20 million in illicit profits. This case demonstrates the [SEC’s] ongoing commitment to exposing insider trading wherever it occurs, including in SPAC mergers.”

Controversies Surrounding the Merger
While there is no allegation implicating Donald Trump in the insider trading, the charges add fuel to the fire surrounding the DWAC-Trump Media deal. This deal has been under the microscope, raising concerns among legal experts and attracting attention from regulators and prosecutors. Moreover, the Nasdaq stock exchange threatened to delist Digital World last month due to its failure to file a quarterly report, and nearly two years after the merger was initially announced, it has yet to be finalized.

All three defendants have surrendered to the authorities and were expected to make their initial appearance in a federal court in Miami on Thursday.

The case serves as a stark reminder of the importance of transparency and integrity in financial transactions, particularly involving prominent public figures and companies. It is likely to be closely watched by investors, regulators, and the general public as it unfolds.
Newsletter

Related Articles

Barbados Times
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×