In a significant development, an investor in the shell company that merged with Trump Media has been found guilty of insider trading, according to federal prosecutors. The investor, Bruce Garelick, who served as a director at Digital World Acquisition Corporation (DWAC), used confidential information about the impending merger with Trump Media to conduct insider trading and tip off others. The trades proved to be lucrative as shares of DWAC soared following the announcement of the blockbuster deal.

Garelick's conviction serves as a stark reminder that insider trading is a violation of the law, as noted by Damian Williams, the US Attorney for the Southern District of New York. Last June, Garelick along with two other individuals, Michael Shvartsman and Gerald Shvartsman, were arrested and charged in connection with the insider trading scheme. The Shvartsman brothers pleaded guilty to their involvement in the scheme.

It is important to highlight that prosecutors have not alleged any involvement by former President Donald Trump, the chairman and leading shareholder of Trump Media, in the insider trading case.

According to the June indictment, Garelick utilized undisclosed information regarding DWAC's merger plans to carry out profitable trades. He allegedly attended board meetings where discussions were held regarding the timing, terms, and anticipated closing date of the merger agreement with Trump Media. Garelick subsequently shared this non-public information with the Shvartsman brothers, who proceeded to purchase Digital World securities.

Furthermore, Garelick and his co-defendants reportedly tipped off friends and colleagues to invest in Digital World before the official announcement of the Trump Media merger. This dissemination of privileged information extended beyond their personal trades.

After facing years of delays, Trump Media finalized its merger with Digital World in late March, paving the way for the company to begin publicly trading on the Nasdaq under the ticker symbol "DJT". Despite generating minimal revenue and existing as a relatively small player in social media with Truth Social, Trump Media has garnered a valution that experts find questionable.

As the leading shareholder, Donald Trump now holds a total of 114.75 million shares in Trump Media, following the receipt of additional shares through a recent bonus. With current market prices, this stake is estimated to be worth approximately $6.2 billion.

The investor's conviction highlights the ongoing efforts to combat insider trading and uphold the integrity of financial markets.