SEC Charges Milan Patel with Spreading False Rumors to Generate Illicit Trading Profits

Litigation Release No. 25641 / February 16, 2023

Securities and Exchange Commission v. Milan Patel, Civil Action No. 2:23-cv-00026-RWS (N.D. Ga. filed Feb. 16, 2023)

The Securities and Exchange Commission has charged Milan Vinod Patel of Cumming, Georgia, for allegedly spreading more than 100 false rumors about public companies. Patel is accused of generating over $1 million in illicit trading profits through this scheme. Barton Ross, Mark Melnick, Anthony Salandra, and Charles Parrino have also been previously charged for their involvement.

According to the SEC’s complaint, Patel received false rumors from Ross, Salandra, or Parrino regarding market-moving events involving publicly-traded companies. He then disseminated these rumors to his contacts at financial news services, chat rooms, and message boards. Additionally, Patel shared the rumors with Melnick, who hosted a stock trading webcast and passed them on to his subscribers. The circulation of these rumors between December 2017 and January 2020 temporarily increased the prices of the subject companies’ securities. Patel took advantage of this situation by selling his holdings and making more than $1 million in illegal trading profits.

The SEC’s complaint, filed in the United States 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 and Jonathan Austin of the Enforcement Division’s Crypto Assets and Cyber Unit, under the supervision of Deborah Tarasevich, David Hirsch, and Mr. Sansone. The SEC’s litigation will be led by Damon Taaffe, supervised by James Carlson. The SEC acknowledges the assistance provided by the U.S. Attorney’s Office for the Northern District of Georgia and the FBI.

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About SEC

The Securities and Exchange Commission (SEC) is a regulatory agency in the United States that oversees the securities industry, including stocks, bonds, and other investment products. Its primary goal is to protect investors and maintain fair and efficient markets. The SEC enforces laws and regulations related to securities offerings, trading activities, and financial reporting by public companies. It also works to prevent fraud and misconduct in the industry through investigations and enforcement actions. Additionally, the SEC provides guidance and educates the public about investing and the risks associated with it.

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