(NEW YORK) — Two brothers who helped fund former President Donald Trump’s now-public social media company pleaded guilty Wednesday to insider trading.
Michael Shvartsman and Gerald Shvartsman made millions by trading in shares of Digital World Acquisition Corporation before it merged with Trump Media, according to federal prosecutors in New York.
Michael Shvartsman, 52, of Sunny Isles Beach, Florida, and Gerald Shvartsman, 45, of Aventura, Florida, were arrested on securities fraud charges last July.
They each pleaded guilty Wednesday to one count of securities fraud.
Each of them faces up to 20 years in prison when they’re sentenced in July, but prosecutors agreed to recommend a sentence of about three years.
“Michael and Gerald Shvartsman 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,” said U.S. Attorney Damian Williams. “Insider trading is cheating, plain and simple.”
Prosecutors said the brothers placed an associate on DWAC’s board of directors, who funneled them valuable information about the merger plan with Trump Media that the brothers then used to trade. Together, they made $22 million in illegal profits, prosecutors said.
There was no evidence that former President Trump was aware of the brothers’ conduct, and he was not part of the case.
Trump Media went public last month and is now trading on the Nasdaq exchange.
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