An insider trading trial began Tuesday for a financial executive accused of allowing his boss and others to illegally make millions of dollars off news that an acquisition firm was looking to take the former president’s media company public. Donald Trump.
In opening statements, Assistant U.S. Attorney Elizabeth Hanft accused Bruce Garelick of telling his boss and friends about the news in 2021 that the special purpose acquisition company, Digital World Acquisition Corporation., merged with Trump Media & Technology Group.
Defense attorney Jonathan Bach insisted in his opening statement that Garelick was innocent and did not warn anyone.
“He didn’t commit any crime. Bruce is a man of integrity and ethnicity,” Bach told jurors in Manhattan federal court.
Several weeks ago, Garelick’s co-defendants – Michael Schwartzman of Sunny Isles Beach, Florida, and his brother Gerald Schwartzman of Aventura, Florida – pleaded guilty to insider trading, admitting that they illegally earned more than $22 million. They will be sentenced on July 17.
Michael Schwartzman owned the venture capital firm Rocket One Capital LLC, and Garelick, of Providence, Rhode Island, was the company’s chief investment officer, although he worked primarily in the Boston area throughout his career.
The charges against the men did not involve Trump, who is again seeking the presidency as a Republican this year, nor the Trump Media & Technology Group, which owns him. Truth Social platform and began trading on the NASDAQ stock market on March 26.
On Tuesday, Hanft told jurors that Garelick and those he tipped off invested millions of dollars in digital securities after being told Trump Media was a potential DWAC target.
When the deal was announced, the defendants sold their securities for a $22 million profit, although Bach noted that his client was only accused of making just $49,000 on the trades. He asked jurors whether it made sense for Garelick to risk the reputation he had built over decades in the securities business for that amount of money.
“He followed the rules,” Bach said. “Bruce was not in the same social circles as everyone else involved in this case. … He wasn’t anyone’s close friend or buddy.”
Hanft, however, said Garelick took information he learned while on the DWAC board of directors and passed on the secrets to others.
She said prosecutors will use witnesses, trading and phone records, as well as emails and text messages to prove their case.