RUMOR MILL ROLLS IN MILLIONS! Patel Jailed for Fake News Stock Scheme!

SEC v. Milan Patel — U.S. Securities and Exchange Commission Litigation Release No. 26283, dated April 11, 2025.

The SEC charged Milan Patel for spreading over 100 false rumors about public companies to inflate their stock prices, enabling him to profit over $1 million. He has been permanently enjoined from violating securities laws, ordered to pay disgorgement and interest, and received an 18-month prison sentence in a parallel criminal case.

In Plain English

Imagine someone spreads fake news about a company, like saying it's being bought when it's not. This fake news makes people think the company's stock is suddenly worth more. The person spreading the fake news then quickly sells their own stock for a profit before the truth comes out. Milan Patel did this over 100 times, making over a million dollars. He has now been ordered to pay back the illegal profits and faces prison time.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Receive Fabricated Rumors Milan Patel received false information, including rumors about corporate mergers or acquisitions, from individuals like Barton Ross, Anthony Salandra, or Charles Parrino. He knew these rumors were not true.
2. Disseminate to Contacts Patel then sent these bogus rumors to his contacts at financial news services, chat rooms, and other news outlets. He used instant messages to spread the false information.
3. News Services Amplify Patel's contacts would then immediately share these rumors further through their news services. The false information also spread rapidly in online chat rooms and message boards.
4. Share with Webcast Host Additionally, Patel allegedly shared the false rumors with Mark Melnick, who hosted a stock trading webcast. Melnick then shared these rumors with his webcast subscribers.
5. Temporary Price Inflation The circulation of these over 100 rumors between December 2017 and January 2020 caused the stock prices of the targeted companies to rise temporarily.
6. Sell Holdings for Profit During this temporary price increase, Patel was able to sell his own holdings in these securities. This allowed him to generate illicit trading profits.
7. Illicit Profits Realized Through this scheme, Patel allegedly generated more than $1 million in illegal trading profits by exploiting the market's reaction to the false rumors.

The Enforcement Action

On April 11, 2025, the U.S. District Court for the Northern District of Georgia entered a final judgment against Milan Vinod Patel for his role in a scheme that spread over 100 false rumors about public companies, generating millions in illicit trading profits. The SEC previously charged Barton Ross, Mark Melnick, Anthony Salandra, and Charles Parrino. The judgment permanently enjoins Patel from violating antifraud provisions, orders him to pay $1,125,263 in disgorgement plus $395,309 in prejudgment interest. In a parallel action, Patel pleaded guilty to criminal charges and was sentenced to eighteen months in prison.

Named in this action: Milan Patel.

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