The former US President announced his intention to create a new social media platform after he was banned from Facebook and Twitter last year.
WASHINGTON — Three Florida men were charged Thursday in criminal and civil complaints with insider trading of a shell company’s stock before it announced plans to merge with a social media firm launched by former President Donald Trump.
The men, Michael Shvartsman, Gerald Shvartsman, and Bruce Garelick, allegedly netted more than $22 million in illicit profits from trading in shares of Digital World Acquisition Corp.
All three were arrested Thursday morning, said the Justice Department.
The Securities and Exchange Commission also filed a civil complaint against Garelick, the Shvartsmans, who are brothers, and Rocket One Capital LLC, a venture capital firm owned by Michael Shvartsman.
The charges do not allege wrongdoing by Trump or any of his family members.
A spokesman for TMTG did not immediately respond to a request for comment about the allegations.
The DOJ announced the charges related to the Trump Media proposed merger as part of a string of allegations of illegal trading. They included accusations that two Pfizer employees traded on non-public information about trial results for its Covid treatment Paxlovid.
Digital World Acquisition Corp. is a special purpose acquisition company, or SPAC, that announced plans to merge with Trump Media & Technology Group in October 2021. The SPAC merger aimed to help TMTG go public without the lengthy process of a formal IPO. CNBC Politics
But as of Thursday, the merger announced more than 18 months ago had not happened yet. Instead, DWAC has struggled to raise money from investors amid multiple federal investigations into its practices and its funding.
The company first revealed that it was under investigation by the Securities and Exchange Commission in a June 2022 filing. A week later, Trump’s media company was subpoenaed by a grand jury in relation to the DWAC probe.
TMTG includes Truth Social, the social media platform Trump launched after Twitter banned him for his tweets on Jan. 6, 2021, when hundreds of his supporters stormed the U.S. Capitol.
DWAC shares closed at $12.66 on Wednesday. The stock has been on a downward slide since it hit an end of day high of $94 on October 22, 2021, after the planned merger with Trump’s media group was announced.
This is a developing story, please check back for updates.
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