Two investors connected to an insider trading scheme surrounding the merger of Digital World Acquisition Corporation (DWAC) with Trump Media & Technology Group have admitted their guilt.
Michael Shvartsman and Gerald Shvartsman, brothers from Florida, entered guilty pleas for one count of securities fraud each in New York City on Wednesday.
Brothers Plead Guilty to Insider Trading in DWAC-Trump Media Merger
The case, which emerged approximately 10 months ago, centers on allegations of trading in DWAC securities based on confidential information regarding the merger between DWAC and Trump Media.
According to prosecutors, the brothers accrued over $22 million in illegal profits from these trades.
US Attorney Damian Williams explained in a statement that Michael and Gerald Shvartsman confessed in court to receiving confidential information about the impending DWAC and Trump Media merger. They then utilized this information to conduct profitable but unlawful trades on the open market.
The two invested millions in Digital World Acquisition Corp. upon learning of its potential merger with Trump Media. As per the court papers, they disclosed this information to acquaintances and staff, who also acquired tens of thousands of securities.
Initially, both defendants pleaded not guilty to the charges but later changed their pleas. This development comes after a string of legal proceedings since their arrest and charges last July.
Federal prosecutors revealed that the brothers were provided confidential information about the merger, which they used to make profitable but unlawful trades.
Michael and Gerald Shvartsman allegedly disseminated this information to associates, making significant profits before the merger was publicly announced.
"I've made a terrible mistake," Gerald Shvartsman acknowledged.
Similarly, Michael Shvartsman admitted his awareness of the illegality of his actions.
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No Charges for Trump
"Insider trading is cheating, plain and simple, and today's convictions should remind anyone who may be tempted to corrupt the integrity of the stock market that it will earn them a ticket to prison," Williams emphasized in a statement.
The sentencing for the brothers is scheduled for July 17, with each count carrying a maximum penalty of 20 years in prison.
While the guilty pleas mark a significant development in the case, further legal proceedings are anticipated, with a third individual, Bruce Garelick, set to go to trial later this month.
It's important to note that no charges were brought against former President Donald Trump or anyone from Trump Media in connection to this case.
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