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Press Release

Two Individuals Plead Guilty To Participating In Insider Trading Scheme Based On SPAC Merger With Trump Media & Technology Group

For Immediate Release
U.S. Attorney's Office, Southern District of New York
Michael Shvartsman and Gerald Shvartsman Made More Than $22 Million in Illegal Profits by Trading in Advance of the Announcement that Digital World Acquisition Company Was Going to Merge with Former President Donald J. Trump’s Media Company

Damian Williams, the United States Attorney for the Southern District of New York, announced today that MICHAEL SHVARTSMAN and GERALD SHVARTSMAN each pled guilty to one count of securities fraud, both in connection with their participation in an insider trading scheme surrounding the merger of Digital World Acquisition Corporation (“DWAC”) with Trump Media & Technology Group (“Trump Media”).  MICHAEL and GERALD SHVARTSMAN were arrested in June 2023 and pled guilty today before U.S. District Judge Lewis J. Liman.

U.S. Attorney Damian Williams said: “Michael and Gerald Shvartsman admitted in court that they received confidential, inside information about an upcoming merger between DWAC and Trump Media and used that information to make profitable, but illegal, open-market trades.  Insider trading is cheating, plain and simple, and today’s convictions should remind anyone who may be tempted to corrupt the integrity of the stock market that it will earn them a ticket to prison.”

According to the allegations in the Indictment and statements made in public court proceedings:

In October 2021, MICHAEL SHVARTSMAN and GERALD SHVARTSMAN together made more than $22 million dollars in illegal profits by trading in securities of DWAC based on material, non-public information (“MNPI”) about DWAC’s planned, but not yet public, business combination with Trump Media, a media company founded by former President Donald J. Trump.

As sophisticated investors, MICHAEL SHVARTSMAN and GERALD SHVARTSMAN were invited to invest in DWAC and another special purpose acquisition company (“SPAC”), and after signing non-disclosure agreements, they were provided confidential information about the SPACs, including that a potential target of the SPACs was Trump Media.  As a condition of receiving this information, the defendants were prohibited by the non-disclosure agreements from disclosing the confidential information they learned or using it to buy and sell securities on the open market.  After making initial investments into DWAC through the initial public offering process, through placing their associate on DWAC’s board of directors, the defendants continued to learn valuable MNPI about DWAC’s plans to merge with Trump Media, such the status of the merger negotiations and the timing of a public merger announcement.

In violation of the non-disclosure agreements that they had signed, and in contravention of their associate’s duties and responsibilities as a board member, the defendants bought millions of dollars of DWAC securities on the open market before the news of the Trump Media business combination was public.  The defendants also tipped others about the upcoming merger, inducing further trades in DWAC securities on the basis of the MNPI they had obtained subject to their non-disclosure agreement and through their associate’s board seat.

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MICHAEL SHVARTSMAN, 53, of Sunny Isles Beach, Florida, and GERALD SHVARTSMAN, 46, of Aventura, Florida, each pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison.

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.  MICHAEL SHVARTSMAN and GERALD SHVARTSMAN are scheduled to be sentenced by Judge Liman on July 17, 2024, at 2:00 p.m. and 3:00 p.m., respectively.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and Homeland Security Investigations.  Mr. Williams also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action.

The prosecution of this case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorneys Elizabeth A. Hanft, Daniel G. Nessim, and Matthew R. Shahabian are in charge of the prosecution.


Nicholas Biase, Lauren Scarff, Shelby Wratchford
(212) 637-2600

Updated April 3, 2024

Securities, Commodities, & Investment Fraud
Press Release Number: 24-111