NEW YORK, April 3 (Reuters) - An early investor in the

company that took former U.S. President Donald Trump's media

business public pleaded guilty in Manhattan on Wednesday to a

federal insider trading charge.

Gerald Shvartsman pleaded guilty at a hearing before U.S.

District Judge Lewis Liman.

Prosecutors charged Shvartsman, his brother and a third man

last year with illegally trading on inside information about

Trump Media & Technology Group's ( DJT ) plan to go

public through a merger with a blank-check company. TMTG

operates Truth Social, Trump's main social media platform.

All three men had pleaded not guilty and were scheduled to

face trial late this month.

Shvartsman's brother, Michael Shvartsman, head of

Miami-based venture capital firm Rocket One Capital, was

scheduled to change his plea at a hearing later on Wednesday.

Rocket One's chief investment officer, Bruce Garelick, also

faces charges.

Prosecutors said the trio signed confidentiality agreements

in June 2021 when they were approached to become early investors

in Digital World Acquisition, the blank-check company. The

agreements required them to keep information they learned

confidential and not trade the company's securities in the open

market, prosecutors said.

After hearing the company was in merger talks with TMTG,

prosecutors said the trio tipped others and bought Digital World

securities, selling them after the deal was announced on Oct.

20, 2021, to make a total of $22 million in illegal profit.

TMTG was publicly listed in late March, and its shares have

been on a wild ride fueled by speculators betting on enthusiasm

for Trump, the Republican presidential candidate in November's

election.

The stock shed early gains this week as Truth Social's

parent company disclosed it had lost more than $58 million in

2023.

TMTG shares were trading at around $51.60 on Wednesday

morning, making Trump's stake worth about $4 billion, though he

is not allowed to sell or borrow against it for six months.

Trump Media ( DJT ) is also embroiled in legal battles in Delaware

and Florida with co-founders Wesley Moss and Andrew Litinsky,

who have accused the company of trying to improperly dilute

their stake. Trump Media ( DJT ) has argued they failed to earn their

shares and seeks to strip them of their ownership.