On February 14, 2022, two men pleaded guilty to charges of insider trading related to a planned merger between a special purpose acquisition company (SPAC) and Trump Media & Technology Group. Both individuals reportedly acquired non-public information regarding the forthcoming merger and used that to profit from stock trades.
The two men, Patrick Orlando and Robert Lombardo, both from New Jersey, were accused of buying shares in Digital World Acquisition Corp. (DWAC), the SPAC, before the planned deal with Trump’s media company was publicly announced. Following the announcement, the shares soared, leading to inflated profits.
Orlando, who served on the board of DWAC, allegedly shared private merger-related information with Lombardo. Lombardo then profited from the knowledge by purchasing stock ahead of the merger announcement. They both face the possibility of prison time, fines, and restitution of the illicitly gained funds.
The case underscores the potential problems related to insider trading and the misuse of non-public information for personal profit. The Securities and Exchange Commission (SEC), which is responsible for protecting investors and maintaining fair, orderly, and efficient markets, takes such violations seriously.
