A federal jury in Manhattan has found the investor involved in the recent, highly significant Trump Media merger guilty.
Bruce Garelick was convicted of five counts of securities fraud and conspiracy for his part in insider trading relating to a significant financial merger.
Insider trading case sees Garelick convicted
Garelick was at the helm of a shell company that merged with former President Donald Trump’s Trump Media. He would then release sensitive insider information that tipped off traders ahead of the official merger, gaining the ire and the hammer of the Securities and Exchange Committee (SEC).
The original filing revealed the extent of the financial gains made through illegal means stating, “In October 2021, MICHAEL SHVARTSMAN, GERALD SHVARTSMAN, and BRUCE GARELICK together made more than $22 million dollars in illegal profits by trading in securities of Digital World Acquisition Corporation (“DWAC”) based on MNPI about DWAC’s planned but not yet public business combination with a media company founded by former President Donald J. Trump.”
Digital World Acquisition Corporation (DWAC) shares skyrocketed just before the significant business deal to make DJT public, primarily due to the information Garelick disclosed.
“Bruce Garelick was part of a sophisticated group of individuals invited to invest in Digital World Acquisition Corporation (DWAC), a special purpose acquisition company that had raised funds with the intention of later investing in a target company, Trump Media & Technology Group, not yet known to the public,” said U.S. Attorney Damian Williams in a statement released by the Justice Department’s newsroom.
“When he was given that opportunity, Garelick promised to keep the information about DWAC’s interest in acquiring Trump Media secret and not use it to trade in the stock market.”
Garelick hasn’t yet been sentenced for these five securities and trading fraud counts, but the penalty could be harsh.
Each count of securities fraud under Title 15 carries a maximum sentence of 20 years in prison, one count of securities fraud under Title 18 carries a maximum sentence of 25 years in prison, and one count of conspiracy carries a maximum sentence of five years in prison.
Williams aptly concluded saying, “As a unanimous jury has just found, Garelick blatantly violated the law by using the information that he obtained as an insider at DWAC to trade and tip others. Garelick’s federal conviction is yet another stark reminder that insider trading is always a losing bet.”
