Quick Buck: Indian American Charged for Spreading False Rumors About Public Firms
- By spreading the false information, Milan Vinod Patel generated over $1 million in illicit trading profits.
The Securities and Exchange Commission has 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.
According to the SEC complaint, Patel received rumors that he knew to be false about purported market-moving events, such as corporate mergers or acquisitions, involving publicly-traded companies. He then spread the rumors to his contacts at financial news services, chat rooms, and message boards.
He also allegedly disseminated the rumors to Mark Melnick, a host of a stock trading webcast, who shared them with his webcast subscribers, SEC said. The circulation of more than 100 rumors between December 2017 and January 2020 caused the prices of the subject companies’ securities to rise temporarily, SEC said. This allowed Patel to sell his holdings in such securities and generate more than $1 million in illicit trading profits.
The 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 had previously charged Barton Ross, Mark Melnick, Anthony Salandra, and Charles Parrino for their roles in this scheme.