Insider trading cases on Truth Social have led to federal charges against several individuals.
These cases involve allegations of using confidential information to trade on the platform.
One notable case involves a former employee who allegedly used company information to buy and sell stocks, resulting in significant profits.
The former employee's actions were discovered through a thorough investigation by the Securities and Exchange Commission (SEC).
The SEC's investigation found that the employee had access to confidential information due to their position within the company.
Insider Trading Cases
The Shvartsman brothers, Michael and Gerald, were charged with insider trading for making $22 million in illegal profits.
They pleaded guilty to one count of securities fraud and face up to 20 years in prison.
The brothers admitted to receiving confidential information about a merger between DWAC and Trump Media.
They used this information to trade on the open market, which is against the law.
US Attorney Damian Williams said, "Insider trading is cheating, plain and simple."
The Shvartsmans placed an associate on DWAC's board of directors, who funneled them valuable information about the merger plan.
This information allowed them to make profitable trades before the merger was announced.
The brothers' actions were part of a larger case involving three men who funded Trump's social media company.
Bruce Garelick, the chief investment officer of Rocket One, is scheduled to face trial on related charges.
Garelick sat on the board of directors at DWAC, which was created for the sole purpose of merging with Trump's social media enterprise.
The three men allegedly seized the opportunity to acquire hundreds of thousands of stakes before the merger was announced.
They then sold their shares after the deal was announced, making a total of $22 million in illegal profit.
The SEC alleges that the trio violated confidentiality agreements and insider trading rules.
The case demonstrates the SEC's commitment to exposing insider trading wherever it occurs.
The Shvartsmans are scheduled to be sentenced on July 17, and could face up to 20 years in prison.
Prosecutors agreed to recommend a sentence of about three years.
The brothers' actions were a clear example of insider trading, and they have been held accountable for their actions.
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Federal Charges
Three men, Michael and Gerald Shvartsman, and Bruce Garelick, were charged with insider trading in relation to Truth Social.
They allegedly received confidential information about a merger between DWAC and Trump Media, which they used to make illegal trades.
Prosecutors said the brothers placed an associate on DWAC's board of directors, who funneled them valuable information about the merger plan.
The trio made $23 million in illegal profits, according to prosecutors.
The SEC did not accuse former President Trump himself or his company of wrongdoing.
The men are facing up to 20 years in prison when they're sentenced in July, but prosecutors will recommend a sentence of about three years.
They pleaded guilty to one count of securities fraud.
Related reading: Trump Names Truth Social Ceo to Head Intelligence Board
Frequently Asked Questions
What is the most famous example of insider trading?
The most infamous example of insider trading is the case of Ivan Boesky, who made over $200 million by trading on tips from corporate insiders in the mid-1980s. This high-profile scandal involved key players like Michael Milken and led to significant changes in financial regulations.
Who owns Truth Social now?
Truth Social is owned by the Donald J. Trump Revocable Trust, which holds a majority stake in Trump Media & Technology Group Corp. (TMTG), the parent company of Truth Social.
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