Three Florida men have been charged with making more than 22 million US dollars through illegal insider trading before the public announcement that an acquisition firm was going to take former president Donald Trump’s media company public.

The charges were outlined in an indictment unsealed in New York that did not in any way implicate Mr Trump or Trump Media & Technology Group, which owns his Truth Social platform.

The charges make it less likely that Trump Media will be able to pocket the 1.3 billion dollars promised upon completion of a merger with the acquisition firm. The merger is pending the approval of securities regulators.

According to the indictment, the men were invited to invest in the special purpose acquisition company, Digital World Acquisition Corp, and were provided confidential information that a potential target of DWAC and another acquisition company, Benessere Capital Acquisition Corp, was Trump Media.

Authorities said the defendants bought millions of dollars of DWAC securities on the open market before news of the Trump Media business was made public.

After the public announcement, the men dumped their securities for a significant profit, according to the court papers.

The indictment said one of the defendants tipped off a neighbour to buy stock in DWAC, calling it a “good bet” without saying how he knew.

“Insider trading is not easy money,” US attorney Damian Williams said in a release. “It’s cheating. It’s a bad bet. Because my office, the Southern District of New York, is watching. And we’re working quickly to investigate and prosecute anyone who corrupts our financial markets. And we’ll keep at it as long as it takes. You can bet on that.”

The arrested men were identified as Michael Shvartsman, 52, of Sunny Isles Beach, Florida; his brother Gerald Shvartsman, 45, of Aventura, Florida; and Bruce Garelick, 53, of Fort Lauderdale, Florida.

All three made initial court appearances on Thursday afternoon in Miami and were freed on bonds.

Michael Shvartsman owned Rocket One Capital LLC, a venture capital firm. Garelick was Rocket One’s chief investment officer, according to court papers.

According to the indictment, Garelick was given a seat on DWAC’s board of directors and had access to confidential information. It said he then shared that information with his alleged co-conspirators.

The indictment said that between June 2021 and November 2021, the men purchased securities including warrants of their own and shared the secrets with their friends and employees, who also bought tens of thousands of units of securities ahead of the merger announcement with Trump Media & Technology Group.

Typically, a special purpose acquisition company, or Spac, is formed with the intent to merge with a private company before the private company becomes publicly traded.

In early 2021, representatives of Trump Media, including Mr Trump, began communicating with principles of Benessere about potentially merging to take Trump Media public, the indictment said.

Between March and June 2021, Trump Media and Benessere entered into nonbinding letters of intent to merge, it said.

The letters required confidentiality but did allow Benessere and its agents to share confidential information with investors in the special purpose acquisition companies, the indictment said.

Jay Ritter, a University of Florida expert on stock markets who has followed Mr Trump’s media venture, said the new charges make it unlikely securities regulators will approve the merger.

Mr Ritter added, though, that Mr Trump’s company may be able to find alternative partners to help fund it.

“Trump Media’s likelihood of being a profitable company is fairly good. This is not some pie-in-the-sky electric vehicle start-up that needs to burn through millions of dollars and not come up with anything,” he said. “Some other company will come through and invest.”