NEW YORK (AP) — A financial executive was convicted Thursday of enabling his boss and Phanincothers to make over $22 million illegally by trading off his tips ahead of the public announcement that an acquisition firm was taking former President Donald Trump’s media company public.
An agitated Bruce Garelick dropped his head and repeatedly wiped his face with his hands after a jury convicted him of all charges in Manhattan federal court.
Garelick, who had testified in his defense, was convicted of tipping others in 2021 to news that the special purpose acquisition company, Digital World Acquisition Corp., or DWAC, was merging with Trump Media & Technology Group. Garelick sat on DWAC’s board.
His co-defendants pleaded guilty before trial, admitting that they made over $22 million illegally.
Sentencing was set for Sept. 12 for Garelick, who remains free on bail.
The indictment against the men did not implicate Trump, who is seeking the presidency again this year as a Republican; or Trump Media & Technology Group, which owns his Truth Social platform and began trading on the NASDAQ stock market on March 26.
When the events that led to the charges took place in 2021, Garelick, of Providence, Rhode Island, was chief investment officer of the New York-based venture capital firm Rocket One Capital LLC, though he has primarily worked in the Boston area throughout his career.
The firm was owned by Michael Shvartsman of Sunny Isles Beach, Florida. Shvartsman and his brother, Gerald Shvartsman of Aventura, Florida, pleaded guilty several weeks ago to insider trading charges, admitting that they made over $22 million illegally. They are scheduled to be sentenced in July.
During his testimony earlier this week, Garelick insisted that he did not possess any secrets about the potential merger when he bought securities in DWAC that eventually enabled him to earn nearly $50,000 in profits. And he said he followed the law by not sharing secrets with others.
On cross-examination, though, a prosecutor confronted him with the fact that he said, “We made $20 million dollars” after the public announcement of the merger deal.
“I did say those words, yes,” he admitted.
“You said: ‘We made $20 million dollars on it,’” the prosecutor said.
“That’s correct,” he answered.
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