AP Photo/Paul Sancya
Two venture capitalists from Florida confessed on Wednesday to being part of an insider trading plot that raised the stock price of former President Donald Trump’s media company. Donald Trump’s media company.
Brothers Michael and Gerald Shvartsman each pleaded guilty in New York to one count of securities fraud, which reportedly carries a maximum 20-year sentence.
The brothers “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,” the US Attorney for the Southern District of New York said in a statement after the plea.
“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,” added the statement.
CNN reported on the guilty plea and explained that “the two brothers were arrested in June and 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.”
The two brothers were accused by federal prosecutors of profiting some $22 million back in October of 2021 by using insider knowledge of Trump’s merger deal to buy stock ahead of time. Trump Media finally went public last week and has added billions to the former president’s net worth, despite the company reportedly not being profitable.
“There was no allegation in the indictment that Trump himself had any involvement in the alleged insider trading scheme,” added the CNN report.
