A Florida venture capitalist and his brother are potentially moving towards guilty pleas in an insider trading case connected to the merger that took Donald Trump’s social media company public last week. Michael Shvartsman and his brother, Gerald Shvartsman, had previously pleaded not guilty to criminal charges of insider trading and conspiracy. A new court filing revealed that a change of plea hearing for the brothers is scheduled to be held in U.S. District Court in Manhattan. Additionally, New York defense attorney Alan Futerfas has joined Michael Shvartsman’s legal team, but he declined to comment on the case or whether his client would plead guilty.
Earlier this year, Michael Shvartsman was charged with money laundering in addition to the securities fraud counts he was facing. Trump Media and Technology Group mentioned the case in a securities filing, stating that the individuals involved have no affiliation with TMTG. The U.S. Attorney’s Office in Manhattan, which is prosecuting the case, did not immediately respond to a request for comment. Another man involved in the case, Bruce Garelick, has also pleaded not guilty, and as of now, there is no change of plea hearing scheduled for him. The trial for all three men is set to begin on April 29.
The Shvartsmans and Garelick were indicted in June on securities fraud and conspiracy charges related to buying DWAC stock based on nonpublic information about the possible merger with Trump Media. The three men allegedly made a substantial profit on their investments after DWAC announced its merger with Trump Media. Michael Shvartsman, as CEO of Rocket One Capital LLC in Miami, is accused of engaging in money laundering by concealing the source of the funds he obtained from selling the DWAC stock. The indictment alleges that he used various methods to hide the source of the money, including transferring funds to a bank account controlled by a business associate and using legal agreements to conceal the ownership of a luxury yacht he purchased.
The filings in the case came just days after Trump Media’s shares started trading on the Nasdaq Stock Market following the merger with Digital World Acquisition Corp. The Shvartsmans and Garelick allegedly bought DWAC stock based on insider information about the merger, which led to a significant increase in the stock price. The men are accused of selling their shares for a substantial profit after the merger was announced. Michael Shvartsman faces charges of money laundering in addition to securities fraud and conspiracy charges. Prosecutors are seeking the forfeiture of a bank account, a luxury yacht, and three Yamaha Jet Skis that were purchased with the proceeds of the illegal stock sales.
The involvement of New York defense attorney Alan Futerfas in the case has added a new element, particularly given his past representation of Donald Trump and his family. The plea hearing scheduled for the Shvartsmans indicates that they may be considering changing their pleas to guilty, while the trial for all three men is still set to proceed on April 29. The case highlights the consequences of insider trading and financial fraud, as well as the importance of transparency and adherence to securities laws in the business world. The outcome of the case will likely have ramifications for all parties involved and could impact the future of Trump Media and Technology Group.
