WASHINGTON, Feb 23 (PTI): The US Securities and Exchange Commission has charged an Indian-origin man who played the central role in spreading over 100 false rumours about public companies to generate more than USD one million in illicit trading profits.
Milan Vinod Patel of Cumming, Georgia, is among the five individuals involved in this scheme who have been charged by the SEC in which he is said to have played the central role.
According to the SEC complaint, Patel received rumours about purported market-moving events, such as corporate mergers or acquisitions, involving publicly-traded companies, and disseminated the information to his contacts at financial news services, chat rooms, and message boards.
The circulation of more than 100 rumours 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 USD 1 million in illicit trading profits, the SEC said in a statement on February 16.
Patel also disseminated the rumours to Melnick, a host of a stock trading webcast, who shared them with his webcast subscribers.
“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 rumours via the internet, generating more than USD 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,” Sansone said.
Patel has been charged under Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The SEC previously charged Barton Ross, Mark Melnick, Anthony Salandra, and Charles Parrino for their roles in this scheme.