NEW YORK — Three investors in Donald Trump’s media company were hit with insider trading charges Thursday, accused of reaping $22 million in illegal profits based on confidential information they told friends about on a gambling vacation.
Florida men Gerald Shvartsman, 45, Michael Shvartsman, 52, and Bruce Garelick, 52, were accused in Manhattan federal court of securities fraud charges carrying up to 20 years in prison. The feds say they spent millions on stocks in Digital World Acquisition Corporation in October 2021, aware it was about to enter a moneymaking merger with Trump Media & Technology Group, which owns Truth Social.
Garelick shared information he had access to as a board member of Digital World with the Shvartsman brothers in the alleged scheme, with all three selling their stock for a steep profit weeks after the deal was publicly announced, according to the feds.
The trio illegally advised friends on a trip to Las Vegas and Gerald Shvartsman’s employees at a furniture supply store to get in on the action, too, the feds charge.
Trump is not accused of anything nor involved in the case. But it could hurt the lucrative pending merger the company he founded stands to profit from significantly.
The charges were included among four major insider trading cases announced by Williams’ office, including against a Pfizer employee indicted for buying the pharmaceutical company’s short-dated, out-of-the-money call options after he confidentially learned Paxlovid successfully treated COVID-19.
“Insider trading is not a quick buck. It’s not easy money. It’s not a sure thing. It’s cheating. It’s a bad bet. It’s a ticket to prison,” Manhattan U.S. Attorney Damian Williams said.
“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.”
