Trump Media Investor Convicted of Pre-Merger Insider Trading | Wilnesh News

A federal jury in New York on Thursday convicted an investor of insider trading in a shell company’s stock before it announced in October 2021 that it would merge with the shell company. Trump Media.

Investor Bruce Garelick was on the board of directors of publicly traded Digital World Acquisition Corp. when he was accused of sharing and exploiting with others non-public information about the company and its then-merger plans. The owner of the application.

Trump Media, whose majority owner is former President Trump, has not been accused of any wrongdoing in the case against Garelick in U.S. District Court in Manhattan.

But Garryk’s trial began on April 30, just blocks from where Trump is being tried in Manhattan Supreme Court on criminal charges related to hush-money payments to porn star Stormy Daniels.

Two of Galilek’s co-defendants, brothers Michael Shvartsman and Gerald Shvartsman, pleaded guilty April 3 to insider trading charges.

Jurors in the Garelick case began deliberations Wednesday afternoon after hearing closing arguments from prosecutors and defense attorneys. After deliberating for several hours Thursday, the jury returned a guilty verdict against Garelick, 54, on five counts of securities fraud and conspiracy.

Garelick testified at the trial and is expected to be sentenced on September 12.

Gary Leake is an investment adviser at Michael Shvartsman’s venture capital firm Rocket One Capital. Prosecutors said that after joining DWAC’s board of directors, Garelick shared material non-public information with the Shvartsman brothers in 2021 about DWAC’s planned merger with Trump Media.

Prosecutors said the three men then bought DWAC stock based on non-public information and sold their shares after the stock price soared after the deal to merge with Trump Media was announced.

According to prosecutors, Garlick made only $49,000 in illegal transactions, but the Schwarzman family made as much as $23 million in profits.

“Bruce Garelick is part of a sophisticated group of individuals invited to invest in Digital World Acquisition Corporation…a special purpose acquisition company that raises capital with the purpose of subsequently investing in target company Trump Media & Technology Group (Trump Media & Technology Group) and not yet known to the public,” Manhattan U.S. Attorney Damian Williams said in a statement Thursday.

“When Garelick was offered the opportunity, he promised to keep information about DWAC’s interest in acquiring Trump Media confidential and not to use the information to trade on the stock market. Garelick also received a seat on DWAC’s board of directors, which made him He had direct access to more information.

“As the jury just unanimously found, Garelick blatantly violated the law by trading on and providing information to others based on information he obtained as a DWAC insider,” the lead prosecutor said. “Garylik’s federal conviction once again starkly demonstrates A reminder that insider trading is always a losing bet.”

DWAC and Trump Media completed their merger at the end of March. One day later, the company’s shares began trading publicly under the new ticker symbol DJT.

last week, Securities and Exchange Commission Accusations that Trump Media’s auditor committed what regulators called “massive fraud” involved the auditor’s accounting work for hundreds of public companies, affecting 1,500 SEC filings.

auditor, BF Boggs CPAand its owner, Benjamin Borgers, agreed to permanently suspend accountants before the SEC and pay civil penalties totaling $14 million.

Trump Media hires a new auditor, Semple Marshall Cooper LLP Replaced BF Borgers last weekend.

This is breaking news. Please check back for updates.