Three men were arrested Thursday on insider trading charges related to a proposed business merger with the company that owns former President Trump’s Truth Social platform, the Justice Department announced.
The three Floridians are accused of making $22 million by buying stock in a special purpose acquisition company (SPAC) that was to acquire Trump Media & Technology Group to take the company public.
The charges were outlined in an indictment unsealed in Manhattan federal court that did not implicate Trump or his media company in any way.
SPACs are business entities created to serve as a method of turning a private company public through acquisition.
Once it was announced that Trump Media & Technology Group would merge with the SPAC, Digital World Acquisition Corporation, the three men dumped their stock for a massive profit, according to the indictment, as well as a complaint filed by the Securities and Exchange Commission (SEC).
One of the men, Bruce Garelick, was a board member of Digital World. He is accused of sharing confidential merger information with his boss, Michael Shvartsman, who in turn shared it with his brother, Gerald Shvartsman, according to the SEC.
“Insider trading is not easy money,” U.S. 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 Associated Press contributed.