SEC Charges Final Participant in Multi-Million Dollar Scheme to Spread and Trade on False Rumors about Public Companies

Washington, D.C.–(Newsfile Corp. – February 16, 2023) – The Securities and Exchange Commission today charged Milan Vinod Patel, of Cumming, Georgia, for spreading more than 100 false rumors about public companies to generate more than $1 million in illicit trading profits. The SEC previously charged Barton Ross, Mark Melnick, Anthony Salandra, and Charles Parrino for their roles in this scheme.

According to the SEC’s complaint, Patel received rumors that he knew to be false from Ross, Salandra, or Parrino about purported market-moving events, such as corporate mergers or acquisitions, involving publicly-traded companies, and disseminated the rumors to his contacts at financial news services, chat rooms, and message boards. Patel also disseminated the rumors to Melnick, a host of a stock trading webcast, who shared them with his webcast subscribers. The circulation of more than 100 rumors between December 2017 and January 2020 caused the prices of the subject companies’ securities to rise temporarily, which allowed Patel to sell his holdings in such securities and generate more than $1 million in illicit trading profits.

“Out of the five individuals involved in this scheme, we allege that Patel played the central role of using his contacts to repeatedly spread the false rumors via the internet, generating more than $1 million in illicit profits for himself,” said Joseph G. Sansone, Chief of the Enforcement Division’s Market Abuse Unit. “Today’s action seeks to hold Patel accountable for his alleged misconduct and serves as a warning to others who might engage in similar schemes.”

The SEC’s complaint, filed in the United Stated District Court for the Northern District of Georgia, charges Patel with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

The SEC’s investigation was conducted by Martin Zerwitz of the Enforcement Division’s Crypto Assets and Cyber Unit and Jonathan Austin. It was supervised by Deborah Tarasevich, David Hirsch, and Mr. Sansone. The SEC’s litigation will be led by Damon Taaffe and supervised by James Carlson. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of Georgia and the FBI.