The Securities and Exchange Commission has recently indicted three investors involved in taking former President Donald Trump’s Twitter alternative, Truth Social, public.
The trio—brothers Michael and Gerald Shvartsman and Bruce Garelick who worked for Michael Shvartsman—are accused of rolling up $23 million in October 2021 due to their non-public intel about the corporate maneuvers, violating confidentiality agreements and insider trading rules in the process.
The New York Times reported that the brothers have retained attorneys Grant Smith and Robert Buschel, most famous for representing Roger Stone, a political trickster who has long served as a formal and informal adviser to Trump.
While Trump himself is not accused of any wrongdoing, it is clear that Garelick was privy to merger plans before the rest of the investment world – which allowed him to acquire hundreds of thousands of stakes before its official announcement; allowing them to cash in afterward.
Gurbir Grewal from the SEC’s Division of Enforcement stated that: “This case demonstrates the Commission’s ongoing commitment to exposing insider trading wherever it occurs.”
However despite this strong statement against such illegal activities – Truth Social still trades at a little under $13 a share only slightly more than when these indicted investors first bought in.
The Nasdaq threatened to remove Digital World Acquisition Corporation (the company responsible for turning Truth Social into a hot tech stock) from its exchange back in March due to its securities struggling to attract interest from potential buyers.
In an attempt to prove its viability, they cited Fox News reports about Trump’s pledge not to return to Twitter – yet this failed to find success with potential customers.