Florida brothers plead guilty in NYC to $22M Trump Media insider trading scheme [New York Daily News]

A pair of Florida brothers pleaded guilty to insider trading charges, admitting they pocketed millions of dollars by illegally swapping secrets about the recent money-making merger that saw Donald Trump’s media outfit go public.

Michael Shvartsman, 53, and Gerald Shvartsman, 46, admitted Wednesday in Manhattan Federal Court that they made millions trading non-public information about the merger between Digital World Acquisition Corp. and Trump Media & Technology Group in 2021.

Manhattan U.S. Attorney Damian Williams said the Shvartsman brothers saw an opportunity to make a fat profit when they confidentially learned of shell company Digital World’s planned but not yet public business combination with Truth Social’s parent company after they were invited to invest early and signed nondisclosure agreements.

“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 said.

According to the feds, the Shvartsmans gleaned the particulars after placing an associate on the shell company’s board of directors, including the status of negotiations and expected timeline. The brothers then made millions buying and selling related securities and tipped off others to do the same.

According to their plea agreements, Michael, who runs venture capitalist firm Rocket One Capital, profited around $18.2 million — spending a chunk of it on a yacht named “Provocateur” that he’s agreed to forfeit along with its three Yamaha Jet Skis. His brother, Gerard, made around $4.6 million.

Both Shvartsmans, arrested in June 2023, pleaded guilty to one count of securities fraud and are set to be sentenced in July. Their attorneys did not respond to inquiries. Bruce Garelick, a third man charged in the scheme expected to stand trial later this month, denies culpability.

Trump and Trump Media were not accused of wrongdoing in the case.

The former president and presumed Republican nominee in this year’s election saw his estimated net worth climb to nearly $4 billion after “DJT” stocks began to trade last week following the merger’s completion, according to The New York Times. He’s not expected to be able to sell his shares for six months.

Some financial experts have expressed skepticism about the multibillion-dollar price tag investors have slapped on Trump Media, given that Truth Social reported $3 million in revenue for the first nine months of 2023 and lost $49 million.

©2024 New York Daily News. Visit nydailynews.com. Distributed by Tribune Content Agency, LLC.