– Three Floridian men, Michael Schwartzman, Gerald Schwartzman, and Bruce Garelrick, are accused of insider trading, allegedly making millions of dollars from the merger of Digital World Acquisition Corp and Trump Media & Technology Group.
– The U.S. Department of Justice and the Securities and Exchange Commission have filed criminal and civil charges against the trio, potentially leading to decades in prison if convicted.
Well, well, well, isn’t this a Sunshine State hootenanny? Three ambitious Floridian gentlemen, Michael Schwartzman, his brother Gerald Schwartzman, and Bruce Garelrick are in for a bit of a brouhaha. They’ve been accused of insider trading, allegedly raking in over $22 million, just before former President Donald Trump’s social media company planned to go public. Michael Schwartzman was the head honcho of Rocket One Capital, a venture capital firm, while his brother Gerald apparently ran a furniture store, because why not diversify?
In what sounds like a Tom Clancy novel gone awry, these men allegedly orchestrated an insider trading scheme around the merger of Digital World Acquisition Corp (DWAC) and Trump Media & Technology Group (TMTG). Allegedly, they used “intelligence” about the merger talks, courtesy of their cohort Garelick, who was also a director of DWAC. Armed with that juicy info, the Schwartzmans started buying up DWAC securities, apparently playing Wall Street Monopoly with real money.
Here’s the kicker: they sold their shares within two days of the merger announcement on October 20, 2021, which sent DWAC’s stock price into LEO (low earth orbit). The result? An alleged windfall of about $18.3 million for Michael Schwartzman, $4.6 million for Gerald Schwartzman, and a not-so-insignificant $50,000 for Garelick. That’s a lot of beachfront property and speedboats in Florida currency.
Now, the U.S. Department of Justice and the Securities and Exchange Commission (SEC) have decided this financial fiesta needs a closer look. In perfect government synchrony, they filed criminal and civil charges against the three Floridian amigos. The potential outcome? Decades in prison if convicted. Makes you wonder if this white-collar crime gig is worth the risk.
But the plot thickens. While these legal shenanigans play out, the DWAC-TMTG merger is in limbo. If it does happen, Trump’s social media venture stands to gain access to more than $1 billion in capital from DWAC’s institutional investors. However, shareholders have pushed the merger deadline to September 2023, showing they’re more patient than a sloth on sedatives.
As the drama unfolds, nobody from DWAC has said a word about the insider trading allegations. The accused trio’s lawyer, Grant Smith, has also decided that silence is golden. So, the public waits with bated breath, popcorn in hand, as the fate of the DWAC-TMTG merger hangs in the balance, overshadowed by allegations of insider trading. Isn’t the business world a fascinating soap opera?