Three charged with insider trading on Trump's SPAC deal
The big picture: The charges do not implicate Trump or anyone else directly involved with Truth Social, but do stem from investigations that have prevented the company from going public.
- The U.S. Securities & Exchange Commission on Thursday also filed a similar insider trading complaint against the three men.
Driving the news: Prosecutors allege that the defendants learned that Digital World Acquisition Corp. (DWAC) had agreed to purchase Trump Media & Technology Group, and bought shares of DWAC before the merger was publicly announced.
- The merger announcement caused DWAC shares to spike, after which the men allegedly generated $22 million in "illegal profits" by selling their stock.
- One of the defendants, Bruce Garelick, was a director of DWAC, whose shares have fallen more than 40% over the past year and more than 85% from their all-time closing high.
- All three arrests occurred in Florida.
What we're watching: The complaint notes that Trump and other associates had conversations about a SPAC merger with the sponsor of DWAC, prior to DWAC itself going public.
- That could lead to future charges from securities regulators, given that SPACs are not supposed to have such talks prior to IPO.
Read the complaint: