Ex-Trump SPAC Board Member Convicted in Insider Trading Case

Bruce Garelick, a former board member of Digital World Acquisition Corp (DWAC), the company that merged with Trump Media in March, was convicted on Thursday of conspiracy and securities fraud charges. The charges stemmed from allegations that Garelick provided confidential information to others, including Michael Shvartsman and Gerald Shvartsman, about Trump Media’s impending merger with DWAC. This information allegedly allowed the Shvartsman brothers to make approximately $22 million through illegal trading, with Garelick himself profiting about $50,000 from the scheme.

The trial revealed that Garelick, a former hedge fund manager, was accused of buying three million shares in DWAC alongside the Shvartsman brothers ahead of the company’s IPO. The Shvartsman brothers pleaded guilty to their securities fraud charges last month and are awaiting sentencing in July. Notably, Trump and his company were not implicated in the case.

Garelick, who resigned from DWAC’s board in 2022, faces up to 25 years in prison. He is currently free on bail and is set to be sentenced on September 12. Despite requests for comment, a representative for Garelick has not responded to inquiries from Forbes.

The news of Garelick’s conviction had an immediate impact on the market, with shares of Trump Media surging more than 10% to $54.45, the highest level since late March. This increase in share price contributed to an estimated net worth of $8.1 billion for Trump, ranking him as the 318th richest person in the world.

The case highlighted the complexities surrounding Trump Media’s efforts to merge with DWAC, a process that began in late 2021 and faced numerous obstacles. The successful merger allowed Trump Media to go public and significantly boosted Trump’s net worth by approximately $4 billion, even as he was dealing with significant civil judgments totaling over $550 million.

The legal proceedings underscored the serious consequences of insider trading, with Garelick now facing the prospect of a lengthy prison sentence. The case also serves as a cautionary tale for others involved in securities trading, as illegal activities can lead to substantial financial penalties and long-term damage to one’s reputation.