Bruce Garelick, a former director at Digital World Acquisition Corporation (DWAC), was found guilty of insider trading in connection to the blockbuster deal with Trump Media, according to federal prosecutors. Garelick was accused of using confidential information about the impending deal to make trades and tip off others, resulting in significant gains as DWAC shares surged following the announcement of the merger.
The US Attorney for the Southern District of New York, Damian Williams, stated, “Garelick blatantly violated the law by using the information that he obtained as an insider at DWAC to trade and tip others.” Garelick was one of three men arrested and charged in the insider trading case, with the other two, Michael and Gerald Shvartsman, pleading guilty last month.
Prosecutors did not allege any involvement by former President Donald Trump, the chairman and leading shareholder of Trump Media, in the scheme. Garelick allegedly shared non-public information about the merger plan with the Shvartsman brothers, who then purchased Digital World securities. Additionally, Garelick and his co-defendants reportedly informed friends and colleagues who also bought securities before the deal was publicly announced.
Despite Trump Media’s limited revenue and the small presence of Truth Social in the social media landscape, the company achieved a massive valuation that experts find questionable. Trump, the dominant shareholder, holds approximately 114.75 million shares worth around $6.2 billion at current prices. The merger between Trump Media and DWAC was finalized in late March, allowing the company to trade publicly on the Nasdaq under the ticker symbol “DJT.”
