Putin-connected businessman loaned $8M to Trump entity involved in alleged insider trading

A Russian businessman based in South Florida may have made millions off of insider trading in a scheme involving the parent company of former President Donald Trump's Truth Social platform.

The Miami Herald reported Wednesday that investor Anton Postolnikov — the nephew of a former staffer to Russian President Vladimir Putin — is mentioned in court documents from a 2023 New York securities fraud case prosecutors brought against three men from South Florida. Gerald and Michael Shvartsman, along with accomplice Bruce Garelick, allegedly pocketed $23 million from insider trading involving a 2021 merger between Trump Media and Technology Group and the Miami, Florida-based Digital World Acquisition Corp.

Garelick and the Shvartsman brothers are accused of sharing non-public information with friends and colleagues in order to maximize their gains from the deal. Documents show Postolnikov loaned $8 million to Trump's company through a Caribbean bank he owns that frequently works with the pornography industry.

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While neither Trump nor Postolnikov are facing any allegations of wrongdoing from the deal, the Herald reported that prosecutors could tack on more charges in a subsequent indictment. However, it remains unclear if Postolnikov will be added as an additional defendant. A separate filing by Tai Park — the defense attorney representing Michael Shvartsman — suggests that his client could face new charges of money laundering in response to his efforts to conceal his alleged insider trading profits.

Meanwhile, Garelick, who sat on the board of Digital World Acquisition Corp, is accused of making $50,000 from the merger in his work for Shvartsman's company, Rocket One Capital. Digital World is a special purpose acquisition company, or SPAC, which is often used as a vehicle for entities seeking to become publicly traded companies, as it involves less regulatory oversight than a traditional initial public offering (IPO). The Herald reported that months before the merger was announced, Garelick wrote a message to Postolnikov that read "Anton, Good times last night! Following up on that Trump Media Group SPAC we mentioned. The deal is going to finalize this week. Please let us know if you are interested in investing."

The murky details of the merger may be partially why the deal has yet to be approved by the US Securities and Exchange Commission after being on hold for more than two years. As a result of that delay, Trump Media and Technology Group has bled approximately $1 billion in investment commitments as of fall 2023. in the first three quarters of 2023, the company only posted $3.4 million in total revenue, which is far behind competing social media companies like Facebook and X/Twitter.

University of Florida business professor Jay Ritter — an expert on publicly traded companies — told the Herald that the fact that the merger is still on hold is "pretty unprecedented." He also likened the SPAC's performance to a "meme stock," in which social media sentiment drives a stock's performance more than other traditional business metrics.

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Click here to read the Herald's full report.