Prosecutors are seeking significant prison sentences for two brothers involved in insider trading in a blank-check company’s securities before its merger with Trump Media. Michael Shvartsman is facing between 46 months and 57 months in prison for his $18 million in illicit profits, while his brother Gerald Shvartsman could be sentenced to at least two years for earning $4.6 million. Both men are not U.S. citizens and may face deportation after their sentences are served. Another defendant, Bruce Garelick, who stood trial and was convicted of insider trading, faces between 108 months and 135 months in prison.
The case involved the Shvartsman brothers receiving non-public information about Trump Media being a merger target of Digital World Acquisition Corp. They made illegal trades based on this information and profited from the stock surge following the merger announcement. Trump Media’s merger with DWAC was delayed until March 2022, and the merged company now trades under the ticker DJT. The Manhattan U.S. Attorney’s Office has recommended prison time for Michael Shvartsman based on his manipulative and greedy conduct. His defense lawyers argue for a lower sentence, citing his acceptance of responsibility and the consequences he has already faced.
Gerald Shvartsman’s lawyers are seeking a sentence with no prison time, suggesting 18 months of home confinement due to his health issues and potential impact on his furniture company and employees. Both brothers face financial consequences and potential deportation, which could harm their families. The Sentencing Office is recommending a lesser prison sentence for Gerald compared to the other defendants due to his relative culpability. Despite paying his forfeiture amount, Gerald Shvartsman’s lawyers are pushing for a more lenient sentence, highlighting the potential negative effects of a lengthy prison term on his business and health.
Prosecutors have criticized Michael Shvartsman for not submitting a financial statement to the Probation Office, suggesting he acts as if he is above the law. His defense lawyers maintain that he has paid the full forfeiture amount and argue against the need for the financial statement. They emphasize the impact of the case on Shvartsman’s reputation and his family’s well-being. Both brothers have faced significant repercussions from their actions, including loss of business and potential deportation.
The sentencing recommendations vary for each defendant, with prosecutors seeking substantial prison time for Michael Shvartsman, while Gerald’s lawyers are advocating for home confinement. The case highlights the consequences of engaging in insider trading and the potential impact on individuals’ lives and businesses. Judge Lewis Liman will make the final decision on the sentencing for the defendants based on their criminal conduct, financial impact, and family circumstances. The legal proceedings underscore the seriousness of white-collar crimes and their implications for those involved.
