illustration by Asia91
Atlanta, USA: Milan Patel, an Indian-origin trader, has been sentenced to 18 months in prison for devising a multi-million dollar stock market manipulation scheme.
Patel, along with four co-conspirators, spread false rumors to artificially inflate stock prices, profiting from quick trades before the market corrected itself.
Key Facts:
- The scam involved 500 fraudulent trades, generating $2.65 million in illegal profits.
- Patel and his team circulated false rumors through trading platforms, misleading investors.
- Despite the scale of the fraud, Patel was sentenced to only 18 months in prison and fined $10,000.
Between October 2017 and January 2020, Patel and his associates spread false information about publicly traded companies, particularly targeting short-term call options.
The group used instant messaging apps to draft rumors, which were later pushed through financial news services like Trade The News and Benzinga.
As a result, stock prices surged briefly, allowing them to sell their options at a profit before the deception was exposed.
Authorities, including the FBI and the Securities and Exchange Commission (SEC), launched an extensive investigation into the case.
“The defendants used their financial acumen to manipulate securities markets,” stated Acting U.S. Attorney Richard S. Moultrie Jr. The SEC is also pursuing civil enforcement actions against Patel and his co-conspirators.
“These sentencings should serve as a reminder to anyone attempting to tilt the balance of financial markets in their direction,” said Sean Burke, Acting Special Agent in Charge of FBI Atlanta.
Despite their significant profits, Patel and his co-conspirators received relatively lenient sentences.
Observers argue this case highlights loopholes in the system that allow white-collar criminals to get away with minor consequences.