3 charged in insider trading case related to taking Trump media firm public accused of making USD 22 million

     New York, Jun 29 (AP) Three Florida men were arrested on Thursday and charged with illegally making more than USD 22 million by insider trading ahead of the public announcement that an acquisition firm was going to take a media company owned by former President Donald Trump public.
    The charges were outlined in an indictment unsealed in Manhattan federal court that did not implicate Trump in any way. The indictment was among four separate insider trading cases brought against 10 people, including a Pfizer employee and an investment firm executive director.
    According to the indictment pertaining to the media company, 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 and Technology Group.
    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.
    “Insider trading is not easy money,” US Attorney Damian Williams said in a release. “It's cheating. It's a bad bet. 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; Gerald Shvartsman, 45, of Aventura, Florida; and Bruce Garelick, 53, of Fort Lauderdale, Florida. It was unclear who would represent them at Thursday afternoon initial court appearances in Miami.
    Michael Shvartsman owned Rocket One Capital LLC, a venture capital firm. His brother, Gerald Shvartsman, was Rocket One's chief investment officer, according to court papers.
    According to the indictment, Garelick was given a seat on DWAC's board of directors and had access to confidential information. It said he then shared that information with his co-conspirators.
    A lawyer who has represented Garelick in the past did not immediately return a message seeking comment Thursday.
    The indictment said that between June 2021 and November 2021, the men purchased securities including warrants of their own and shared the secrets with their friends and employees, who also bought tens of thousands of units of securities ahead of the merger announcement with Trump Media and Technology Group.
     Typically, a special purpose acquisition company, or SPAC, is formed with the intent to merge with a private company before the private company becomes publicly traded.
    In early 2021, representatives of Trump Media, including Trump, began communicating with principles of Benessere about potentially merging to take Trump Media public, the indictment said.
    Between March and June 2021, Trump Media and Benessere entered into nonbinding letters of intent to merge, it said.
    The letters required confidentiality but did allow Benessere and its agents to share confidential information with investors in the special purpose acquisition companies, the indictment said. (AP) PY
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(This story has not been edited by THE WEEK and is auto-generated from PTI)