Florida venture capitalist Michael Shvartsman and his brother Gerald Shvartsman pleaded guilty on Wednesday to participating in an insider trading scheme linked to the blockbuster deal that brought former President Donald Trump’s social media business public.
Each of the brothers pleaded guilty in New York to one count of securities fraud, which carries a maximum sentence of 20 years in prison, according to federal prosecutors.
The two brothers were arrested in Juneand charged with illegally trading on nonpublic knowledge of a shell company’s secret plan to buy Trump Media & Technology Group, the parent company of struggling social network Truth Social.
“Michael and Gerald Shvartsman admitted in court that they received confidential, inside information about an upcoming merger between DWAC and Trump Media and used that information to make profitable, but illegal, open-market trades,” Damian Williams, the US Attorney for the Southern District of New York, said in a statement.
The indictment accused the brothers and a third individual, Bruce Garelick, of together making more than $22 million in October 2021 by trading on their inside knowledge of the deal.
