SEC Charges California Resident with Insider Trading in Advance of DWAC Merger Announcement

ADMINISTRATIVE PROCEEDING
File No. 3-22215

September 27, 2024 - The Securities and Exchange Commission today announced settled charges against Eric Hannelius of Studio City, CA for insider trading in advance of the October 2021 announcement (the “Announcement”) that Digital World Acquisition Corporation (“DWAC”) had reached an agreement to acquire Trump Media & Technology Group Corp. (“TMTG”).

According to the SEC’s order, Hannelius obtained material nonpublic information about the Announcement from Bruce Garelick a director on the board of DWAC, which was a special purpose acquisition company at the time of the relevant conduct. The SEC’s order further finds that, between September 13 and October 20, 2021, Hannelius used Garelick’s tips to buy a total of 11,500 DWAC warrants and 500 DWAC shares, making his first purchase shortly after meeting with Garelick’s employer and Garelick in Miami. On October 20, 2021, after market close, DWAC and TMTG announced that they had entered into a merger agreement. The order finds that Hannelius sold his DWAC securities shortly thereafter, reaping illicit profits of $168,206.

The SEC’s order finds that Hannelius violated the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the SEC’s findings, Hannelius agreed to settle the charges by consenting to a cease-and-desist order and agreeing to pay disgorgement of $168,206, prejudgment interest of $29,400, and a civil money penalty of $168,206.

The SEC’s investigation was conducted by Andrew McFall, David Bennett, Darren Boerner, Patrick McCluskey, and Lindsay S. Moilanen of the Market Abuse Unit. The case was supervised by Joseph Sansone of the Market Abuse Unit and Thomas P. Smith, Jr. of the New York Regional Office.