Financial technology entrepreneur and executive Eric Hannelius reached a settlement with the U.S. Securities and Exchange Commission in September 2024 over allegations that he traded securities after receiving material nonpublic information concerning Digital World Acquisition Corporation’s planned transaction with Trump Media & Technology Group Corp.
According to the SEC, Hannelius purchased shares and warrants of Digital World Acquisition Corporation, commonly known as DWAC, before the October 2021 public announcement that the special purpose acquisition company had reached an agreement to acquire Trump Media & Technology Group.
The SEC found that Hannelius earned approximately $168,206 in profits after the transaction was publicly announced and DWAC’s securities increased in value.
Hannelius resolved the regulatory action without admitting or denying the SEC’s findings. Under the settlement, he agreed to disgorge the $168,206 in profits, pay $29,400 in prejudgment interest and pay an additional civil monetary penalty of $168,206.
SEC Investigation Involving Eric Hannelius
The SEC’s case centered on trading that occurred between September 13 and October 20, 2021.
At the time, Digital World Acquisition Corporation was a publicly traded special purpose acquisition company, or SPAC. DWAC was pursuing a potential business combination with Trump Media & Technology Group, the company associated with the Truth Social platform.
According to the SEC’s September 2024 order, Hannelius obtained material nonpublic information about the planned transaction from Bruce Garelick, who was serving as a director on DWAC’s board.
The SEC said the information was significant because the proposed transaction had not yet been disclosed to investors or the broader securities market.
Purchases of DWAC Shares and Warrants
The SEC found that Hannelius used the information he received to make a series of investments in DWAC before the merger agreement became public.
Between September 13 and October 20, 2021, Hannelius acquired a total of 11,500 DWAC warrants and 500 shares of DWAC common stock.
According to regulators, Hannelius made his first purchase shortly after attending a meeting in Miami involving Garelick and Garelick’s employer.
The SEC concluded that the information Hannelius received from Garelick constituted material nonpublic information and that his subsequent trading violated federal securities laws.
DWAC Announces Trump Media Agreement
The information became public after the market closed on October 20, 2021, when DWAC and Trump Media & Technology Group announced that they had entered into a merger agreement.
The announcement generated substantial investor interest in DWAC.
According to the SEC, Hannelius sold the DWAC securities he had accumulated before the announcement shortly afterward.
Regulators calculated the resulting profits at $168,206.
SEC Finds Securities Law Violations
Based on its investigation, the SEC found that Hannelius violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.
These federal securities provisions generally prohibit fraudulent or deceptive conduct in connection with the purchase or sale of securities, including certain forms of trading while in possession of material nonpublic information.
The Commission instituted a cease-and-desist proceeding against Hannelius on September 27, 2024. The matter was identified as Administrative Proceeding File No. 3-22215 and Exchange Act Release No. 101210.
Hannelius Settles Without Admitting or Denying Findings
Rather than contest the SEC proceeding, Eric Hannelius submitted an offer of settlement that the Commission accepted.
A significant procedural detail is that Hannelius resolved the matter without admitting or denying the SEC’s findings, except with respect to the Commission’s jurisdiction and other provisions specifically identified in the order.
Under the settlement, Hannelius agreed to a cease-and-desist order and three financial components:
- $168,206 in disgorgement, representing the SEC’s calculation of profits from the trades;
- $29,400 in prejudgment interest; and
- $168,206 as a civil monetary penalty.
Together, those amounts total $365,812.
The proceeding was regulatory and civil in nature. The SEC administrative action did not itself constitute a criminal prosecution of Hannelius.
Broader Investigation Surrounding DWAC Trading
Hannelius was not the only individual whose trading surrounding the DWAC transaction attracted federal scrutiny.
The circumstances surrounding securities transactions made before the Trump Media deal became public resulted in investigations involving several individuals. Separate criminal proceedings were brought against other participants in the broader matter.
Hannelius’s case, however, was resolved through the SEC’s administrative enforcement process. His settlement should therefore be distinguished from criminal cases involving other individuals associated with trading surrounding the transaction.
The SEC’s administrative proceedings database identifies Hannelius’s matter as a standalone administrative proceeding filed on September 27, 2024.
Eric Hannelius’ Financial Technology Career
Separate from the SEC matter, Hannelius has built a career spanning financial technology, payment processing, entrepreneurship and venture investment.
According to the professional information provided for this article, Hannelius describes his experience as encompassing the development and management of businesses in financial services and payment processing.
His areas of experience include startup development, company operations, competitive analysis, financing, mergers and acquisitions, sales and marketing management and financial consulting.
Hannelius has been involved in building and managing businesses within the electronic-payments industry, an area that has undergone substantial technological and regulatory change during his career.
His professional biography also describes experience developing organizations from their early stages and overseeing multiple aspects of business operations.
Vision Payment Solutions
One of Eric Hannelius’s significant business ventures was Vision Payment Solutions.
Hannelius founded the payment-processing company and served as its president and chief executive officer. The business provided payment-processing services before ultimately being acquired by EVO Payments International.
His experience with Vision Payment Solutions reflects a substantial portion of his broader background in electronic payments and financial technology.
More recent biographical information identifies Hannelius with Pepper Pay LLC, where he has continued working in payment technology and financial services.
These business activities are separate from the SEC’s 2024 administrative proceeding and provide additional context regarding Hannelius’s professional career.
Education and Early Background
Hannelius’s educational background differs somewhat from the technology and financial-services industries in which he later built his career.
According to the confirmed professional information provided for this article, Hannelius attended California State University, Northridge, where he earned a Bachelor of Arts degree in Political Science in 1979.
He subsequently attended Hunter College in New York.
From 1980 through 1983, Eric Hannelius pursued graduate studies in Russian Studies at Hunter College, earning a Master of Arts degree.
His later professional career moved into entrepreneurship, financial services, venture capital and payment-processing technology rather than the academic fields reflected in his undergraduate and graduate education.
From Entrepreneurship to Financial Technology
Over the course of his career, Eric Hannelius developed experience in several interconnected areas of business.
His professional background emphasizes an ability to establish and manage companies, develop sales and marketing organizations, evaluate competitive markets and participate in financing and acquisition transactions.
Payment processing eventually became a particularly significant part of that career.
The evolution of electronic payments created opportunities for companies providing transaction processing and financial infrastructure to merchants and other businesses. Eric Hannelius participated in that industry through ventures including Vision Payment Solutions and, more recently, Pepper Pay.
His background therefore encompasses both operational entrepreneurship and the financial-technology sector.
Understanding the SEC Action
There are several important distinctions when reviewing the public record involving Eric Hannelius.
The SEC found that Hannelius traded DWAC securities while possessing material nonpublic information and that his conduct violated federal securities laws. The Commission calculated his resulting profit at $168,206.
Hannelius, however, did not admit those findings as part of the settlement.
Instead, he agreed to resolve the proceeding without admitting or denying the findings, consented to a cease-and-desist order and agreed to the required financial payments.
The $365,812 total financial obligation also consisted of three different components rather than a single fine. Only $168,206 represented the civil monetary penalty; another $168,206 represented disgorgement and $29,400 represented prejudgment interest.
Public Record Today
The SEC proceeding against Eric Hannelius concluded with a settlement announced on September 27, 2024.
According to the Commission, Hannelius obtained material nonpublic information concerning the anticipated DWAC-Trump Media transaction and purchased 11,500 warrants and 500 shares before the transaction was publicly announced. The SEC determined that he subsequently realized $168,206 in profits from those investments.
Hannelius agreed to disgorge those profits, pay prejudgment interest and pay an equal $168,206 civil penalty. He also consented to an SEC cease-and-desist order.
He settled the matter without admitting or denying the SEC’s findings.
Separate from the regulatory proceeding, Hannelius has a lengthy professional history as an entrepreneur and executive in financial technology, payment processing and business development, supported by an educational background in political science and Russian studies.
Taken together, the available records document both Hannelius’s broader business career and the specific 2024 SEC enforcement matter involving his trading in DWAC securities.
Source: https://www.sec.gov/enforcement-litigation/administrative-proceedings/34-101210-s