Topline
An ex-board member with Digital World Acquisition Corp—the publicly traded company that merged with Trump Media in March—was convicted Thursday of conspiracy and securities fraud for trading shares of the company’s stock prior to the merger, according to multiple outlets.
Garelick will be sentenced Sept. 12. (AP Photo/John Minchillo, file)
Key Facts
Bruce Garelick was found guilty of all five of the conspiracy and securities fraud charges against him and now faces up to 25 years in prison.
The former hedge fund manager will be sentenced Sept. 12 and remain free on bail until the hearing.
Garelick was accused of providing confidential information that Trump Media was going to announce a merger with DWAC—knowledge that helped Michael Shvartsman and Gerald Shvartsman, the former of which was Garelick’s boss at a venture capital firm, make about $22 million through illegal trading.
Garelick’s share of the illegal trading profits totaled about $50,000, according to Bloomberg, which noted Trump and his company were not accused of wrongdoing in the case.
The Shvartsman brothers pleaded guilty to their securities fraud charges last month and will be sentenced in July.
A representative for Garelick didn’t immediately respond to Forbes’ request for comment.
This is a developing story. Check back for updates.
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Tangent
Shares of Trump Media traded up more than 10% at $54.45 as of 3:30 p.m., bringing the stock to a high not seen since late March.
Forbes Valuation
We estimate Trump’s net worth at $8.1 billion, making him the 318th richest person in the world.
Key Background
Trump Media has sought to merge with DWAC since late 2021, but has faced years of hurdles. DWAC’s merger with Trump Media allowed the latter company to go public and boosted Trump’s net worth by about $4 billion around the same time he was ordered to pay more than $550 million in three civil judgments—though his ability to sell the shares is limited. Garelick, who sat on DWAC’s board until resigning in 2022, was accused of buying three million shares in the firm alongside the Shvartsman brothers ahead of the company’s IPO. The brothers respectively face up to 20 years in prison over their securities fraud convictions.
Further Reading
Ex-Board Member Of Trump’s SPAC Arrested For Insider Trading (Forbes)
2 Brothers Plead Guilty In Trump Media Insider Trading Case (Forbes)
