(Bloomberg) -- Two investors charged with insider trading in the blank-check company that took Donald Trump’s social media startup public pleaded guilty to a single count of securities fraud less than a month before trial.

Brothers Gerald and Michael Shvartsman, who both initially denied wrongdoing, changed their pleas at a hearing Wednesday in Manhattan ahead of a trial that was scheduled to start April 29. The Florida men were early investors in Digital World Acquisition Corp., whose long-stalled merger with the former president’s company, Trump Media & Technology Group Corp., was completed last month. 

The Shvartsmans and a third Florida man who was charged in the case, Bruce Garelick, were accused last year of making a total of more than $22 million by trading on secret information about Digital World’s merger plans before the Trump deal was announced in 2021. Neither Trump nor his company are accused of wrongdoing in the case. 

“Insider trading is cheating, plain and simple, and today’s convictions should remind anyone who may be tempted to corrupt the integrity of the stock market that it will earn them a ticket to prison,” Damian Williams, US Attorney for the Southern District of New York, said in a statement.

The long-stalled merger last month allowed the media startup, which operates Trump’s Truth Social platform, to begin trading as a public company last week, sending its shares soaring and generating billions of dollars in new wealth for Trump, who owns a stake of about 57%. 

Prosecutors allege the men traded on confidential information about potential merger targets of Digital World, a special purpose acquisition company. The men had signed nondisclosure deals after being invited to invest, giving them access to secret data about Trump Media and other merger targets, the US claims.

Michael Shvartsman is the founder of Rocket One Capital LLC, a Miami-based private equity firm that was subpoenaed as part of the federal probe. Garelick, a Rocket One executive and a former Digital World board member, has pleaded not guilty to the allegations. 

Read More: Trump’s Net Worth Drops $1 Billion as Social Media Firm Sinks

The merger of Digital World with Trump’s company has triggered a spate of unrelated civil lawsuits between individuals involved in the deal, including Trump and two co-founders of Trump Media.

Shares of Trump Media were down about 4% Wednesday, having experienced dramatic highs and lows since they started trading. After initially soaring, they dropped 21% Monday and rebounded 6% on Tuesday.

Digital World announced an agreement to merge with Trump Media in October 2021, sending the shares soaring and handing the three men millions of dollars in profit from trades they made beforehand, according to prosecutors.

The three men were arrested in June and charged with securities fraud, conspiracy and other counts.Under a plea agreement with prosecutors, Gerald Shvartsman, 46, faces up to 46 months under federal sentencing guidelines and Michael Shvartsman, 53, as many as 57 months when they’re sentenced July 17.

Prosecutors had agreed to a lower guideline range if the three had all agreed to plead guilty by yesterday. Garelick has not agreed to plead guilty, but prosecutors have the option to extend the agreement.

Garelick has claimed in court filings that the charges against him are tainted by the alleged misconduct of law enforcement. In a December motion to suppress evidence, Garelick said the government improperly executed a search warrant for his phone while he was passing through a New York City airport by falsely telling him he’d been stopped for a routine search. He claims he was then “tricked” into disclosing the password for his phone.

SPACs are shells designed to buy another company with the investment money they attract and serve as the vehicle for its public listing. SPACs quickly evolved from an obscure corner of the financial world to an investing craze before coming under more government scrutiny. 

The case is US v. Shvartsman, 23-cr-307, US District Court, Southern District of New York (Manhattan).

--With assistance from Chris Dolmetsch.

(Updates with comment from the US Attorney for Manhattan.)

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