(PatriotWise.com) — Two brothers pleaded guilty to insider trading charges last Wednesday after admitting in court that they made more than $22 million in 2021 from purchasing securities in the acquisition firm that would be taking Donald Trump’s media company public before the acquisition was publicly announced, the Associated Press reported.
Gerald and Michael Shvartsman of Florida both pleaded guilty to one count of securities fraud in a Manhattan federal court on April 3.
The brothers admitted that they knew they committed a crime at the time they made trades through a New York broker in October 2021.
Gerald told Judge Lewis Liman that what he did was wrong and he knew it was a “terrible mistake” that he would “pay for dearly the rest of my life.” Michael also acknowledged that he knew the securities trades were illegal.
The indictment against the Shvartsman brothers did not implicate Donald Trump or the Trump Media & Technology Group, which owns the social media platform Truth Social.
Trump Media & Technology Group began trading on the Nasdaq in late March. The former president has a 58 percent stake in the company.
According to the indictment, the Shvartsman brothers invested millions in the securities of Digital World Acquisition Corp (DWAC), a special purchase acquisition firm, after they received a tip that DWAC was planning to acquire Trump Media & Technology Group and take it public.
Prosecutors alleged that the brothers sold the securities for a $22 million profit after the news about the acquisition was made public.
The brothers also shared their insider knowledge with others who also purchased securities ahead of the announced merger.
The 53-year-old Michael Shvartsman formerly owned the venture capital firm Rocket One Capital LLC. He is from Sunny Isles Beach, Florida. The 46-year-old Gerald Shvartsman is from Aventura, Florida.
The brothers, who were arrested last June, will remain free on bail while awaiting sentencing.
Judge Linman scheduled sentencing for July 17.
The plea agreement signed by the brothers included federal sentencing guidelines that recommended about four years for Michael and at least three for Gerald. Michael must also relinquish $18.2 million in profits, while Gerald must forfeit $4.6 million.
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