Milan Patel has been sentenced to prison for his role in a market manipulation scheme involving false rumors about publicly traded companies. Acting U.S. Attorney Richard S. Moultrie, Jr. stated, "The defendants used their financial acumen to manipulate the securities markets by releasing false information about publicly traded companies."
The scheme took place between October 2017 and January 2020, with Patel and his co-conspirators trading securities based on fabricated rumors designed to increase stock prices. Sean Burke of the FBI remarked, "These sentencings should serve as a reminder to anyone attempting to tilt the balance of financial markets in their direction using insider trading."
Patel was part of a group including Bart Ross, Mark Melnick, Anthony Salandra, and Charles Parrino. They primarily dealt with short-term call options on large companies. The group created plausible rumors intended to drive up stock prices so they could profit from subsequent trades.
The conspirators used Trillian instant messaging for drafting these rumors, which were then spread via services like Trade The News and Twitter accounts. Before dissemination, they acquired positions in targeted companies' stocks or options.
In total, over 500 trades resulted in $2,651,320 profits from this fraudulent activity.
U.S. District Judge Leigh Martin May sentenced the individuals involved:
- Milan Patel received an 18-month prison sentence followed by supervised release.
- Charles Parrino was sentenced to one year and one day in prison.
- Mark Melnick received three years’ probation with home confinement.
- Anthony Salandra also received probation with home confinement.
- Bart Ross was given three years’ probation.
The case was investigated by the FBI with help from the SEC. Assistant U.S. Attorney Alex R. Sistla prosecuted it.
Additionally, the SEC is investigating potential civil violations related to this scheme and has filed separate enforcement actions against those involved.
For more information contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.