(Bloomberg) — One of the three investors charged with insider trading in connection with the listing vehicle that took Donald Trump’s media company public intends to change his not-guilty plea in the case less than a month before a federal court trial is set to begin.
US District Judge Lewis J. Liman on Monday scheduled a hearing on the plea change later in the week, but did not specify in his order how Michael Shvartsman will plead. Such entries usually reflect a decision by defendants to admit guilt in at least one charge. Prosecutors and lawyers for Shvartsman did not respond to inquiries seeking comment.
A trial is set to start April 29 for Shvartsman, the chief executive officer of Rocket One Capital LLC, his brother Gerald, and Bruce Garelick, a Rocket executive and former member of Digital World Acquisition Corp.’s board. They’re accused of making more than $22 million trading ahead on confidential information about potential targets of the SPAC, including Trump Media & Technology Group Corp.
The three men were invited to invest in Digital World Acquisition and another SPAC, and they signed nondisclosure agreements that gave them access to confidential information about potential targets of the company, including Trump Media, according to the government.
Digital World announced an agreement to merge with Trump Media in October 2021, sending the shares soaring and handing the three men millions of dollars in profit from trades they made beforehand, according to prosecutors. Shares of Trump’s media company debuted last week after the deal with Digital World closed, providing a much-needed cash infusion following years of delays.
The three men were arrested in June and charged with securities fraud, conspiracy and other counts. If found guilty, they each face as many as 25 years in prison on the most serious fraud charges, although they would probably get less time under federal sentencing guidelines.
Read More: Trump’s Meme Stock Is Skyrocketing But for How Long?
The case is US v. Shvartsman, 23-cr-307, US District Court, Southern District of New York (Manhattan).
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