DAY TRADER NETS $5 MILLION MANIPULATING STOCKS FROM PUERTO RICO!

SEC v. Harsh V. Patel — U.S. Securities and Exchange Commission Litigation Release No. 26532, dated April 20, 2026.

The SEC charged Harsh V. Patel with market manipulation, alleging he orchestrated a scheme to artificially inflate stock prices and profit from them. Patel allegedly used a series of buy and sell orders, often in thinly traded stocks, to create false impressions of demand and then sold his holdings at the inflated prices. The SEC seeks injunctions, disgorgement of ill-gotten gains, and civil penalties.

In Plain English

Imagine someone wants to trick people into buying a toy they own. First, they quickly buy a few of the toy, making it seem like lots of people want it. Then, they pretend even more people are interested by placing fake 'buy' orders they don't intend to complete. This makes the toy's price go up. Finally, they quickly sell their own toys at the higher price and cancel their fake orders. This person did this over a thousand times with stocks, making millions of dollars.

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. Initiate Buying Pressure Patel would start by placing a large number of small market orders to buy a specific security. This action quickly increased the security's price within minutes, especially in thinly traded stocks that are easier to manipulate.
2. Create False Demand Next, Patel placed non-bona fide limit orders to buy the same security. These orders were not intended to be executed but served to falsely signal additional buying interest to the market, further buoying the security's price.
3. Sell at Inflated Price Once the price was artificially inflated, Patel would sell the securities he had just acquired. He did this using a few large-lot market orders to cash in on the higher price.
4. Remove False Orders Finally, Patel would quickly cancel the non-bona fide buy limit orders he had placed. This step helped to remove the artificial indicators of demand and maintain the illusion of price support.
5. Repeat and Evade Patel executed this entire trading strategy in a matter of minutes and repeated it more than a thousand times between May 2021 and January 2024, trading in hundreds of different stocks. As broker-dealers caught on and closed his accounts, he opened new ones in another individual's name to continue the scheme.

The Enforcement Action

On April 20, 2026, the SEC filed charges against Harsh V. Patel in the U.S. District Court for the Southern District of New York for allegedly perpetrating a market manipulation scheme from San Juan, Puerto Rico. The SEC alleges Patel conducted manipulative trading on more than a thousand occasions, trading in hundreds of different stocks from May 2021 to January 2024, generating more than $5 million in ill-gotten gains. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and a civil penalty against Patel.

Named in this action: Harsh V. Patel.

Original SEC litigation release ↗ · Browse all cases