(NEW YORK) -- Three men who funded the company that became Donald Trump's Truth Social platform have been charged with insider trading.
Michael Shvartsman, Gerald Shvartsman and Bruce Garelick made more than $22 million by trading in shares of Digital World Acquisition Corporation, according to federal prosecutors in New York.
The three investors were arrested Thursday on securities fraud charges that accused them of violating an agreement about Digital World Acquisition Corporation's intent to acquire Trump Media and Technology Group, the company that runs Truth Social.
Garelick was given a seat on DWAC's board, allowing him access to non-public information about the company's plans to merge with Trump Media. According to federal prosecutors, Garelick provided the information to Michael and Gerald Shvartsman, who were able to buy millions of shares before news of the Trump Media merger became public.
Prosecutors also said the information was passed to Michael Shvartsman's neighbors and to Gerald Shvartsman's employees at a furniture supply store. As soon as the news hit and the share price increased in value, the defendants, the neighbors and the employees all sold at significant profit, according to the criminal charges.
Michael Shvartsman, 52, of Sunny Isles Beach, Florida; Gerald Shvartsman, 45, of Aventura, Florida; and Garelick, 53, of Fort Lauderdale, Florida, all face securities fraud charges that carry a maximum sentence of 20 years in prison.
"Insider trading is not a quick buck," U.S. Attorney Damian Williams said in a statement. "It's not easy money. It's not a sure thing. It's cheating. It's a bad bet. It's a ticket to prison."