A businessman who invested in the company that took former President Donald Trump’s social media company public was sentenced Wednesday to 22 months in prison for insider trading in connection with the deal.
Gerald Shvartsman made at least $4.6 million trading private information related to the Digital World Acquisition Corp. merger. and Trump Media & Technology Group, which owns the social media platform Truth Social (DJT), according to Bloomberg.
Shvartsman and his brother Michael Shvartsman were both charged with securities fraud in April. Another person involved in insider trading, Bruce Garelick, was found guilty by a jury in May. Michael Shvartsman will be sentenced Thursday, and Garelick will be sentenced Nov. 7.
Prosecutors asked that Gerald Shvartsman be jailed for at least two years, saying he was guilty of “shameful corruption and greed.”
Shvartsman’s lawyers hoped that their client would receive an 18-month probation period. They wrote that their client “has lost his reputation and has been humiliated both personally and professionally. He has lost significant amounts of business due to the loss of banks, credit cards, customers and merchants,” according to CNBC. “His wife and children have suffered and there will continue to be enormous collateral consequences of his actions, which in itself is a significant punishment,” his lawyers continued.
Trump Media (DJT) has had a volatile week. After a week-long rally in which the shares roughly tripled in value, the stock fell 8% on Tuesday afternoon, but recovered on Wednesday and was up 13% by midday. Shares of the company behind Truth Social were trading at $30.78 on Wednesday afternoon.
This shake-up comes just weeks before the presidential election, which will pit Trump against Democratic presidential candidate and Vice President Kamala Harris at the ballot box.
Trump is the majority shareholder of Trump Media, owning about 57% of the company’s stock — and he has said he has no plans to let go of his shares. The stock’s recent rally has added billions to Trump’s fortune.
–Additional reporting by Rocio Fabbro.
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