SEC Charges Bruce Garelick and Shvartsman Brothers with Insider Trading in Digital World Acquisition Corporation SPAC Merger

The SEC has filed insider trading charges against Bruce Garelick, a former board member of Digital World Acquisition Corporation (DWAC), as well as Michael Shvartsman and his firm Rocket One Capital LLC, and Gerald Shvartsman. The complaint alleges that Garelick had access to material nonpublic information regarding potential negotiations between DWAC and its merger target, Trump Media & Technology Group Corp., which he shared with the Shvartsmans. As a result, the three defendants purchased and sold DWAC securities on the open market before the merger announcement was made public, which generated unauthorized profits of over $22.9 million. The SEC seeks permanent injunctive relief, disgorgement of ill-gotten gains, prejudgment interests, and civil penalties from the defendants as well as officer and director bars for Garelick and Michael Shvartsman. The U.S. Attorney’s Office for the Southern District of New York has also announced criminal charges against the named defendants.