Federal prosecutors with the Securities and Exchange Commission (SEC) arrested three of former President Donald Trump’s business associates based on insider trading charges. Bruce Garelick, Michael Shvartsman and Gerald Shvartsman are accused of profiting off of nonpublic information ahead of a publicly traded company’s acquisition of Trump’s media business.

According to the SEC’s complaint, Garelick and the Shvartsmans engaged in insider trading via a special purpose acquisition company (SPAC), known as Digital World Acquisition Corporation (DWAC). SPACs are a type of shell company that raises money from public investors to acquire a privately held business. These companies are designed to circumvent the traditional initial public offering (IPO) processes, which can take longer to reach the public market.

In this case, the private business DWAC was created to acquire Trump’s media business, Trump Media & Technology Group Corporation (TMTG), which is most well-known for its social media platform Truth Social. The SEC claims that, in June 2021, Garelick and the Shvartsmans became aware of DWAC’s intention to acquire TMTG in October 2021. Despite signing a confidentiality agreement with DWAC, Garelick and the Shvartsmans used nonpublic information regarding the acquisition to turn a profit of nearly $23 million, collectively.

The SEC accuses Garelick and the Shvartsmans of violating antifraud provisions contained within Section 10(b) of the Securities Exchange Act of 1934 along with Rule 10b-5. Garelick also faces additional charges of violating reporting obligations in violation of Section 16(a) of the same act and Rule 16a-3.

The US Attorney’s Office for the Southern District of New York (SDNY) also announced a parallel criminal case against Garelick and the Shvartsmans on Thursday. Both Garelick and Michael Shvartsman are charged with five counts of Title 15 securities fraud (maximum sentence of 20 years in prison), one count of Title 18 securities fraud (maximum sentence of 25 years in prison), and one count of conspiracy (maximum sentence of 5 years in prison). Gerald Shvartsman faces almost the exact same charges, but instead of five counts of Title 15 securities fraud, he only faces three.

Trump and his company are not included in either the civil or criminal complaints issued Thursday.

Since DWAC is a Miami-based business, Garelick and the Shvartsmans made their initial appearances in the case before a federal judge in Miami, Florida on Thursday. However, the rest of the case will be heard in a federal courthouse in Manhattan, New York.