Milan Patel has been sentenced to prison for his role in a market manipulation scheme involving false rumors about publicly traded companies. Acting U.S. Attorney Richard S. Moultrie, Jr. stated, "The defendants used their financial acumen to manipulate the securities markets by releasing false information about publicly traded companies." Sean Burke of the FBI emphasized that "investigating this illegal behavior is a top priority of the FBI and you will be held accountable."
The scheme, which took place between October 2017 and January 2020, involved Milan Patel, Bart Ross, Mark Melnick, Anthony Salandra, and Charles Parrino trading short-term call options based on fabricated rumors designed to increase security prices.
Call options allow holders to buy shares at a predetermined price before expiration. The conspirators created and spread false rumors to manipulate stock prices for profitable trades. Ross, Salandra, and Parrino were former brokers with FINRA who drafted these rumors using Trillian messaging app. Melnick provided technical evaluations as a day trader and strategist.
Patel distributed the rumors via Trillian, leading them to be picked up by market subscription services like Trade The News and Benzinga. Before disseminating these rumors, the conspirators bought positions in targeted companies' short-term call options.
Their fraudulent activities resulted in over 500 trades and $2,651,320 in profits.
Sentences were handed down by U.S. District Judge Leigh Martin May:
- Milan Patel received 18 months in prison with three years of supervised release.
- Charles Parrino was sentenced to one year and one day in prison with three years of supervised release.
- Mark Melnick received three years' probation with six months home confinement.
- Anthony Salandra was given three years' probation with six months home confinement.
- Bart Ross was sentenced to three years' probation.
The case was investigated by the FBI with help from the SEC. Assistant U.S. Attorney Alex R. Sistla prosecuted it. The SEC is also conducting an investigation into potential civil violations related to this scheme.
For further information contact the U.S. Attorney’s Public Affairs Office or visit their website.