SEC v. Gerald Shvartsman, Michael Shvartsman, Rocket One Capital LLC — U.S. Securities and Exchange Commission Litigation Release No. 26477, dated February 5, 2026.
The SEC charged Bruce Garelick, Michael Shvartsman, Rocket One Capital LLC, and Gerald Shvartsman with insider trading in Digital World Acquisition Corporation (DWAC) securities. The Shvartsman brothers allegedly traded on material nonpublic information about DWAC's merger negotiations with Trump Media & Technology Group Corp. Final judgments were entered against Gerald and Michael Shvartsman, requiring significant disgorgement and permanently enjoining them from future violations. The SEC also dismissed its action against Rocket One Capital LLC.
Imagine two brothers heard a secret tip about a company they liked, DWAC, that was about to merge with another company, Trump Media. They used this secret info to buy a lot of DWAC stock right before the news became public. When the merger was announced, the stock price shot up, and they quickly sold their shares, making millions of dollars. The government's security agency found out and sued them for using this unfair advantage. Now, the brothers have agreed to pay back all the money they made from this secret tip and are banned from doing it again.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
On January 28, 2026, the U.S. District Court for the Southern District of New York entered final judgments against brothers Gerald Shvartsman and Michael Shvartsman in the SEC’s civil enforcement action. The SEC’s complaint, filed on June 29, 2023, alleged that the Shvartsmans purchased securities of Digital World Acquisition Corporation (DWAC) on the basis of material nonpublic information about the progress of DWAC’s merger negotiations with Trump Media & Technology Group Corp. According to the complaint, shortly after the merger was announced, the price of DWAC stock increased, and Gerald Shvartsman and Michael Shvartsman sold their DWAC securities for net profits of $4,640,325.25 and $18,269,042.98, respectively. The final judgments permanently enjoin the Shvartsmans from further violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment as to Gerald Shvartsman requires him to pay disgorgement of $4,640,325.25, with his obligation to make this payment deemed satisfied by the forfeiture order entered against him in the parallel criminal matter, United States v. Gerald Shvartsman, No. 23-cr-307-LJL (S.D.N.Y.). The judgment as to Michael Shvartsman imposes an officer and director bar and requires him to pay disgorgement of $18,269,042.98, with his obligation to make this payment deemed satisfied by the previous payment of this amount in accordance with the forfeiture order entered against him in the parallel criminal matter, United States v. Michael Shvartsman, No. 23-cr-307-LJL (S.D.N.Y.). The SEC also voluntarily dismissed the action against Rocket One Capital LLC.
Named in this action: Gerald Shvartsman, Michael Shvartsman, Rocket One Capital LLC.