SEC Charges Final Player in Multi-Million Dollar Conspiracy to Distribute and Trade Fake Public Company Rumors

Public Company, Securities and Exchange Commission, Crypto Assets, lawsuit
Public Company, Securities and Exchange Commission, Crypto Assets, lawsuit report

Cumming, Georgia, resident Milan Vinod Patel was accused by the SEC of disseminating more than a hundred false rumours about the public company to make more than $1 million in illegal trading profits. Barton Ross, Mark Melnick, Anthony Salandra, and Charles Parrino were previously charged by the SEC in connection with their roles in this fraud.

False rumours about the public company charges

The SEC alleges that Patel, with the help of Ross, Salandra, and Parrino, spread false reports to his connections at financial news services, chat rooms, and message boards regarding claimed market-moving events, such as corporate mergers and acquisitions, involving publicly-traded firms. Patel also spread the rumours to stock trading webcast host Melnick, who, in turn, told his audience about them. Between December 2017 and January 2020, Patel engaged in illegal trading that netted him over $1 million by driving up the price of securities issued by the subject companies as a result of the spread of more than 100 rumours.

As per Joseph G. Sansone, chief of the Enforcement Division’s Market Abuse Unit, “Out of the five individuals involved in this scheme, we allege that Patel played the central role by using his contacts to continually disseminate the fabricated news via the web, raking in over a million dollars in untaxed income. Taking this step today is necessary in order to “hold Patel accountable for his alleged misbehaviour and serve as a message to others who might engage in similar scams,” as stated in the statement.

Specifically, the Securities and Exchange Commission claims that Patel violated Section 17(a) of the Securities Act of 1933 as well as Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, all of which are alleged in the lawsuit filed by the SEC in the United States District Court for the Northern District of Georgia.

Martin Zerwitz of the Enforcement Division’s Crypto Assets and Cyber Section and Jonathan Austin led the SEC investigation. Deborah Tarasevich, David Hirsch, and Mr Sansone oversaw its completion. Damon Taaffe will head up Securities and Exchange Commission litigation under James Carlson’s watchful eye. Thanks to the U.S. Attorney’s Office for the Northern District of Georgia and the Federal Bureau of Investigation, the SEC was able to investigate this matter.

Leave a Reply

Your email address will not be published.