Three men, Michael Shvartsman and Gerald Shvartsman, who funded a social media company founded by Donald Trump have been charged with insider trading

Three men, Michael Shvartsman and Gerald Shvartsman, who funded a social media company founded by Donald Trump have been charged with insider trading..

Thursday’s charges from the Justice Department were announced by Damian Williams, the US attorney in Manhattan. Neither Trump nor his company, which operates the Truth Social app, was charged.

DWAC did not immediately respond to requests for comment. Grant Smith, a lawyer for the defendants, declined to comment.

Authorities said Garelick, who was also a DWAC director, provided the Shvartsmans with what he called “intelligence” about merger talks.

The defendants then allegedly began buying DWAC securities and passed tips to others, and sold their holdings within two days after the Oct. 20, 2021, merger announcement caused DWAC’s share price to more than quadruple.

Each defendant faces five to seven fraud and conspiracy charges that could lead to decades in prison.

The charges do not allege wrongdoing by Trump or any of his family members.

A spokesman for TMTG did not respond to a request for comment about the allegations.

The DOJ announced the charges related to Trump Media’s proposed merger as part of a string of allegations of illegal trading. They included accusations that two Pfizer

 employees traded on nonpublic information about trial results for its Covid treatment Paxlovid. Digital World Acquisition Group is a SPAC, or special acquisition company — also known as a blank-check company — which are created to facilitate a merger with companies that want to go public on stock exchanges like the Nasdaq.

Garelick was given a seat on Digital World Acquisition Group’s board, allowing him access to nonpublic 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.