@campaignfinance

In July, Digital World said it would pay $18 million if the merger with Trump Media Group goes through, to settle SEC charges that it had misled investors and violated rules designed to counter fraud.

The biggest financial losers from the insider-trading scheme, however, probably were early Digital World investors who believed in Trump’s company enough to buy up shares in the hours after he announced the merger deal.

In the days when the insiders were cashing out, Digital World’s share price peaked at $175. Shares closed Friday at $40.60.

In June 2021, #Orlando went to meet with #Shvartsman and other prospective investors at the Miami-area offices of Rocket One, a little-known private equity firm that had marketed itself on LinkedIn as investing in “fearless entrepreneurs.”

Shvartsman had helped run a nightclub in the 1990s in Edmonton, Alberta, called Kaos that local police alleged was financed by the Russian mob, a 2022 Financial Times report said — a claim Shvartsman denied, and for which he was never charged.

He also founded Transact First, a company whose “cashless ATMs” help marijuana dispensaries transfer money from banks that would otherwise reject them as customers under federal law, according to a Bloomberg News report in 2022, which called him the “granddaddy” of the “major cashless ATM players.”

The meeting came one month after Orlando had signed a registration statement filed with the SEC saying Digital World had not “initiated any substantive discussions, directly or indirectly, with any business combination target.”
But messages included in an FBI affidavit indicate that Trump’s company was part of the conversation in the meeting.

In an email shortly afterward, #Garelick wrote that he and Shvartsman had talked with Orlando about the “future payment processing needs for the Trump Media Group.”

One executive at Rocket One, Allen #Beyer, told the firm’s leaders after the meeting that he was underwhelmed, writing in a text message that Trump’s last online venture, a blog, “was an embarrassment” and that the idea of an app just for “Forever Trumpers” would “be a bust,” the affidavit said.

“Would you ever be associated with this as a ‘founder’ or anything in case it goes up in literal flames?” Beyer wrote.
He did not respond to requests for comment.

Garelick replied, however, that the investment came with “downside protection,” the affidavit said.

Garelick, Shvartsman and his brother, Gerald, who ran an outdoor-furniture store, invested enough to guarantee Garelick a seat on Digital World’s board, the indictment said.

The three men had signed confidentiality agreements before the meeting saying they would not trade on the inside information.

But over the next few months, they bought up hundreds of thousands of dollars of Digital World shares and trading contracts, known as #warrants, for small fractions of the price the shares would command once the deal was publicly disclosed.

The men also spoke with #Postolnikov, another Miami-area entrepreneur who, like Shvartsman, was involved in the business of international payments.

According to British financial records, Postolnikov owns a bank headquartered on the small Caribbean island of Dominica, called Paxum, that promotes itself as a financial conduit for online adult entertainment — an industry, like marijuana dispensaries, that banks traditionally have chosen to avoid.

Born in St. Petersburg, Postolnikov had in 2017 faced an arrest warrant in his hometown on charges of tax fraud, according to a court ruling obtained by The Post. That warrant, the ruling shows, was lifted in 2018, following the direct intervention of Russia’s deputy prosecutor general, who said the case was without merit.

By 2021, Postolnikov, whose uncle, Aleksandr #Smirnov, had served for most of the last two decades as a senior member of the Russian government, was saying in online profiles he lived in Miami Beach.

In March 2021, he donated $30,000 to Florida Gov. Ron #DeSantis’s reelection campaign, campaign finance records show.

A month later, according to Miami-Dade property records, a company he owns bought a $6 million condo on Fisher Island, a private island near Miami Beach once named “America’s richest Zip code.”

In June 2021, after the meeting with Orlando, Garelick wrote Postolnikov an email referring to some “good times last night,” without details, and asked about his interest in investing in “that Trump Media Group #SPAC we mentioned,” the affidavit alleges.

When Digital World announced its initial public offering in September 2021, it made no mention of #Trump and said only that it intended to focus on “middle market and emerging growth technology-focused companies in the Americas.”

But a day later, Postolnikov started buying hundreds of thousands of stock units and warrants in Digital World via a company called APLC Investments, a search warrant affidavit alleges.
#insidertrading #corruption
(2/n)

Michael Shvartsman, his brother Gerald, and Bruce Garelick, the investment chief of Shvartsman’s private-equity firm Rocket One Capital, have been charged with conspiracy and securities fraud.

#DWAC #RocketOne #Garelick #Shvartsman

https://www.washingtonpost.com/technology/2024/02/03/trump-social-dwac-investigation/

Here's my chart from 2022 of Bruce Garelick & Michael Shvartsman before they were charged:

https://newstracs.com/network-chart-for-bruce-garelick-the-former-director-of-trump-media-partner-dwac-and-executive-at-rocket-one/2022/06/27/