Ryan K. Buchanan, U.S. Attorney | U.S. Attorney for the Northern District of Georgia
Milan Patel has been sentenced to prison for his involvement in a market manipulation scheme involving false rumors about publicly traded companies. The scheme, which spanned from October 2017 to January 2020, involved Patel and his co-conspirators profiting by trading short-term call options based on these rumors.
Acting U.S. Attorney Richard S. Moultrie, Jr., commented on the case, stating, "The defendants used their financial acumen to manipulate the securities markets by releasing false information about publicly traded companies." He emphasized the commitment of the office to work with law enforcement partners in investigating and prosecuting securities fraud.
Sean Burke, Acting Special Agent in Charge of FBI Atlanta, remarked on the importance of accountability for such actions: "These sentencings should serve as a reminder to anyone attempting to tilt the balance of financial markets in their direction using insider trading."
Court records indicate that Patel collaborated with Bart Ross, Mark Melnick, Anthony Salandra, and Charles Parrino in spreading materially false rumors intended to inflate security prices. The conspirators often exchanged drafts via Trillian instant messaging before disseminating them through market subscription services and Twitter accounts.
Melnick's role involved providing technical evaluations of rumor plausibility as a T3 Live Senior Trading Strategist. Ross, Salandra, and Parrino were former brokers registered with FINRA and contributed to drafting fraudulent rumors.
Patel played a key role in spreading these rumors across various platforms after he and his co-conspirators acquired positions in targeted companies. Their strategy focused on short-term call options due to their sensitivity to price changes. In total, they executed over 500 trades, yielding $2,651,320 in profits.
U.S. District Judge Leigh Martin May sentenced the defendants as follows:
- Milan Patel received an 18-month prison sentence followed by three years of supervised release and a $10,000 fine.
- Charles Parrino was sentenced to one year and one day in prison with three years of supervised release and a $10,000 fine.
- Mark Melnick was given three years' probation with six months of home confinement and a $4,000 fine.
- Anthony Salandra received three years' probation with six months of home confinement.
- Bart Ross was sentenced to three years' probation.
The Federal Bureau of Investigation led the investigation with assistance from the Securities and Exchange Commission (SEC). Assistant U.S. Attorney Alex R. Sistla prosecuted the case.
The SEC is conducting its own investigation into potential civil violations related to this scheme and has filed separate civil enforcement actions against all five individuals involved.
For more information, contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016. Additional details can be found on their website at http://www.justice.gov/usao-ndga.
