SEC sues Milan Vinod Patel for 100+ false rumors in ‘pump and dump’ scheme

Rick Steves

“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 rumors via the internet, generating more than $1 million in illicit profits for himself.”

The Securities and Exchange Commission has charged Milan Vinod Patel with a false rumors scheme that generated more than $1 million in illicit trading profits for him alone.

Milan Vinod Patel stands accused of spreading more than 100 false rumors about public companies together with other defendants Barton Ross, Mark Melnick, Anthony Salandra, and Charles Parrino.

100 false rumors in ‘pump and dump’ scheme

The complaint alleges that Milan Vinod Patel received rumors that he knew to be false from Ross, Salandra, or Parrino about purported market-moving events, such as corporate mergers or acquisitions, involving publicly-traded companies, and disseminated the rumors to his contacts at financial news services, chat rooms, and message boards.

The defendant also allegedly disseminated the rumors to Melnick, a host of a stock trading webcast, who shared them with his webcast subscribers.

The SEC claims that the circulation of more than 100 rumors between December 2017 and January 2020 caused the prices of the subject companies’ securities to rise temporarily, which allowed Milan Vinod Patel to sell his holdings and generate more than $1 million in illicit trading profits.

“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 rumors via the internet, generating more than $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.”

Mark Melnick spread false rumors on stock trading webcast

In October 2021, FinanceFeeds covered the SEC’s complaint against Mark Melnick, who made $374,000 in illicit profits by spreading false rumors on a stock trading webcast that he hosted. He allegedly received advance notice of companies about which another scheme participant planned to spread false rumors, and then shared the companies’ names with subscribers to his online trading room.

Mark Melnick advised the subscribers that he had taken positions in the companies, while other scheme participants also spread false rumors through real-time financial news services, financial chat rooms, and message boards.

He was ordered to pay a disgorgement of $374,835 plus prejudgment interest and a civil penalty in an amount to be determined at a later date. He also agreed to a penny stock bar and to be barred from the securities industry, and has pleaded guilty to related criminal charges in a parallel action.

Read this next


Kinesis Mint becomes the official partner for the House of Mandela

Kinesis Mint, the certified independent precious metals mint and refinery of Kinesis, the monetary system backed by 1:1 allocated gold and silver, has been appointed the exclusive coin producer for the House of Mandela.


Kadena Announces Annelise Osborne as Chief Business Officer

Kadena, the only scalable Layer-1 Proof-of-Work blockchain, expands its leadership team by onboarding Annelise Osborne as Kadena’s new Chief Business Officer (CBO).


TNS brings full-stack market data management to EMEA

“We are also delighted to have Ben Myers join our London-based TNS Financial Markets team as Head of Strategic Sales for EMEA, to bolster our presence in the region.”


Velocity Labs and Ramp Network facilitate fiat to crypto onramp on Polkadot via Asset Hub support

Velocity Labs is proud to announce a fiat to crypto onramp using Ramp Network through the integration of Asset Hub. Through it, Ramp will be able to service any parachain in the Polkadot ecosystem.

Executive Moves

INFINOX hires Mayne Ayliffe as Global Head of HR

“I look forward to working with our teams around the world to develop a strategic HR agenda that supports high performance and is centred on human motivation.”


Sterling to provide risk and margin support for fixed income

“Firms must have the tools to effectively manage their risk across all asset classes. As yields rise, we see more exposure from clients in the fixed income space. We understand their need to measure and mitigate risk in a highly regulated environment.”

Retail FX

FXOpen launches HK share CFDs: Tencent, Alibaba, Xiaomi, Baidu

Hong Kong share CFDs will be commission-free for a limited period of time.

Retail FX

IronFX Celebrates an Award-Winning Start to 2024 with a Series of Industry Recognitions

IronFX, a global leader in online trading, has embarked on 2024 with a spectacular display of accolades that highlight its commitment to excellence and innovation in the competitive financial services sector.

Industry News

FIA urges CFTC to regulate use cases rather than AI itself

“We urge the CFTC to refrain from crafting new regulations that generally regulate AI because this approach presents certain well-known pitfalls. By approaching the issue from the perspective of AI as a technology, rather than the use case for the technology, corresponding regulations would likely necessitate a definition of AI. We anticipate that any attempt to properly define AI would be very challenging and require considerable resources.”