An investor in the shell company that merged with Trump Media was found guilty on Thursday of insider trading, according to federal prosecutors.
Bruce Garelick, who served as a director at the shell company, was accused of using secret knowledge of the impending deal with Trump Media to trade and tip off others.
Those trades paid off as shares of the shell company, Digital World Acquisition Corporation (DWAC), spiked in October 2021 on news of the blockbuster deal to bring Truth Social owner Trump Media (DJT) public.
“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,” Damian Williams, the US Attorney for the Southern District of New York, said in a statement. “Garelick’s federal conviction is yet another stark reminder that insider trading is always a losing bet.”
Garelick was among three men who were arrested and charged last June in the insider trading case. The other two, Florida venture capitalist Michael Shvartsman and his brother Gerald Shvartsman, pleaded guilty last month to participating in the insider trading scheme.
Prosecutors have not alleged that former President Donald Trump, the chairman and leading shareholder of Trump Media, had any involvement in the scheme.
This is a developing story and will be updated.
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