| Two
Insider
Traders on
Trump Media
SPAC Pled now
Garelick Trial
Counsel
Crosses Tippee
by
Matthew Russell Lee, Patreon Book
Substack
SDNY COURTHOUSE,
May 1 – As the third of four
insider trading prosecutions
announced on June 29, 2023 by
the US Attorney for the
Southern District of New York,
Michael Shvartsman, Gerald
Shvartsman, and Bruce Garelick
were charged with making more
than $22 million dollars in
illegal profits by trading in
securities of Digital World
Acquisition Corporation based
on MNPI about DWAC’s planned
but not yet public business
combination with a media
company founded by former
President Donald J.
Trump.
On July 5, the
case was assigned - wheeled
out - to Judge Lewis J. Liman.
Inner City Press
was there on July 20 and live
tweeted, thread
On December 29 as
part of omnibus pre-trial
motions Shvartsman filed
copies of DHS reports of
investigation, including audio
recordings of Shvartsman
saying he would open an LLC in
Belize which would buy
assets... and ultimately
provided funding for the
'Truth Social' media platform.
It also names the agents who
brought the arrested
defendants to the Wilke D.
Ferguson Jr. Federal
Courthouse and the Marshals...
Late on March 15
Shvartsman through counsel
wrote to Judge Liman alleging
that the US used a Lawyer
Informant to record him.
Counsel identified the Zoom
account used: John [at]
lighthousetrust [dot]
ch. A Google search of
that shows a Lighthouse Trust
General Counsel named John
Ivsan at Linhart Seuss Ivsan
LLP
More on X for
Subscribers here
& Substack here
On April 29, jury
selection began but did not
end, by 6 pm. Of 34
prospective jurors in the
courtroom at 5 pm, each was
summoned into the robing room
for questioning, seemingly
with the defendant present.
Three were excused at 6 pm and
the rest told to return, but
not to read anything about the
case.
Then this request
to start anew: "during today’s
voir dire one prospective
juror openly reported in front
of the venire that she learned
from the news that “[t]here
are two people pleading
guilty” in connection with
this case. Upon the Court’s
request to speak up, the juror
again stated—adding
detail—that “[t]here are two
people pleading guilty and
[Mr. Garelick] is the third
person.” Voir dire continued
over Mr. Garelick’s
objection." Letter on Patreon
here.
On April 30,
after Judge Liman dismissed
some but not all of the
venire, the trial began. At
day's end one of Garelick's
lawyers, pushed for a proffer
of the defense says, named
three other possible tippees.
From May 1, Inner
City Press thread:
Witness is
Hartley Wasko of The Eleven
Fund in Denver. Assistant US
Attorney: Have you heard of
Rocket One? Wasko: Yes, it's
Michael Shvartsman's vehicle.
AUSA: Did you invest alongside
Rocket? Wasko: Yes, 5 or 10
times. I spoke with Michael
every week AUSA: Who is in the
photograph?
Wasko: It's Bruce
Garelick. AUSA: "Ger-el-ick."
Please identify him.
Wasko: There he is. AUSA: He
worked with Michael
Shvartsman? Wasko: Yes. He was
the chief investment officer.
I though he was extremely
sharp, well versed
AUSA: And who's
this? Wasko: It's Gerald
Shvartsman. He's in the
furniture business. AUSA: What
opportunity did Michael bring
to you? Wasko: His SPAC called
DWAC, Digital World.
Patrick Orlando gave a pitch,
late June 2021. The target was
the Trump social media
AUSA: The
Trump social media platform,
what's it called? Wasko: Truth
Social. Patrick Orlando was
very convicted [apparently
means convinced] the Trump
platform was the way forward.
We signed NDAs. AUSA: Publish
GX 212. [Emails gone
over - thread will continue
AUSA: What
was this email? Wasko: Heart
dash Trump SPAC. Founder
shares and $10 IPO shares.
Thanks, Bruce. AUSA: What was
Bruce asking for? Wasko:
Commitments of interest... The
marking line was when it
switched from DWAC to DJT.
AUSA: Did there
come a time that a target was
announced? Wasko: Yes, Trump
Media as the target, a lot of
high-fives. AUSA: What
happened to the share price?
Wasko: It went up a lot. AUSA:
Could you sell your founder's
shares? Wasko: No. AUSA: No
further questions
Now in
cross-examination Garelick's
lawyer. You wrote, Orlando
will have some DWAC news. What
was that news? Witness: I
don't know. I've looked
back... Orlando all the time
said he would have updates.
Garelick's lawyer: But this
was 8 days before the merger
[They're
still going] AUSA: Mr.
Lopez-Torres, are you here
under immunity? A: Yes. AUSA:
Do you know where Gerald
Shvartsman got the information
he gave you about the Trump
Media merger? A: No.
AUSA: We
offer GX 702T - what did you
write?
A: DWAC is going
to announce something big in
the next few weeks. Judge: I
told jurors 5:15 - how much
more? A: I put in $200,000,
"ha ha ha," I was driving. And
an attachment. AUSA: What did
you respond? A: It is Trump
Cross
examination Garelick's lawyer:
You didn't trade on my
information from Mr. Garelick,
did you? A: I didn't
Garelick's lawyer: Gerald was
your employer, right? A: Yes
Garelick's lawyer: Did you
write these emails, saying
"some kind of news will come
out"? Yes
Judge
Liman: I have a 5:30, we'll
end here. Adjourned.
Watch this site.
This case
is US v. Shvartsman, et al.,
23-cr-307 (Liman)
***
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