Financial Executive's Insider Trading Trial Commences in Trump Media Firm Merger Case

A financial executive, Bruce Garelick, is on trial for alleged insider trading related to the merger of Trump Media & Technology Group with Digital World Acquisition Corp. Prosecutors allege Garelick tipped off his boss and others, enabling them to profit illegally. Garelick's defense attorney maintains his innocence and claims he committed no crime. Garelick's co-defendants have pleaded guilty and are scheduled for sentencing in July. The indictment does not implicate Trump or Trump Media & Technology Group. Prosecutors plan to use witnesses, records, and communications to present their case against Garelick.

An insider trading trial began Tuesday for a financial executive charged with enabling his boss and others to make millions of dollars illegally on news that an acquisition firm would be taking former President Donald Trump's media company public.

In an opening statement, Assistant US Attorney Elizabeth Hanft accused Bruce Garelick of tipping off his boss and friends to news in 2021 that the special purpose acquisition company, Digital World Acquisition Corp., was merging with Trump Media & Technology Group.

Defence attorney Jonathan Bach insisted in his opening that Garelick was innocent and did not tip off anyone.

"He did not commit any crime. Bruce is an honest and ethnical man," Bach told the jury in Manhattan federal court.

Several weeks ago, Garelick's co-defendants — Michael Shvartsman of Sunny Isles Beach, Florida, and his brother, Gerald Shvartsman of Aventura, Florida — pleaded guilty to insider trading charges, admitting that they made over USD 22 million illegally. They are scheduled to be sentenced on July 17.

Michael Shvartsman owned Rocket One Capital LLC, a venture capital firm, and Garelick, of Providence, Rhode Island, was the company's chief investment officer, though he has primarily worked in the Boston area throughout his career.

The indictment against the men did not implicate Trump, who is seeking the presidency again this year as a Republican, or Trump Media & Technology Group, which owns his Truth Social platform and began trading on the NASDAQ stock market on March 26.

Hanft told the jury Tuesday that Garelick and those he tipped off invested millions of dollars in the securities of the Digital World after they were tipped off that a potential target of DWAC was Trump Media.

When the deal was announced, the defendants sold their securities for USD 22 million in profits, though Bach noted that his client was only accused of making USD 49,000 from trades. He asked the jury if it made sense that Garelick would risk a reputation built over decades in the securities business for that amount of money.

"He followed the rules," Bach said. "Bruce was not part of the same social circles as everybody else who was part of this case. ... He was nobody's close friend or buddy.'' Hanft, though, said that Garelick took information he learned as a member of DWAC's board of directors and spread the secrets to others.

She said prosecutors will use witnesses, trading and phone records, along with emails and text messages to prove their case.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)