Manipulator uses Twitter to pull off $1.6-mn stock scam: US jury
06 Nov 2015
A federal grand jury in San Franciso has indicted a Scottish trader for using Twitter to make bogus claims that pulled down the stock prices of two companies, in an effort to profit from illegal trading.
62 year old Scotsman James Alan Craig faces a charge of securities fraud and a similar charge by the US Securities and Exchange Commission in a related civil case.
The charges brought yesterday marked the latest effort by US authorities to crack down on the use of social media to commit stock-market fraud.
The whereabouts of Craig could not be established immediately and it remained unclear whether he had hired a lawyer.
According to authorities, in January 2013, Craig created Twitter accounts that appeared to belong to the influential short-selling firms Muddy Waters Research and Citron Research, carrying the handles @Mudd1Waters and @citronresearc and the logos of both companies.
He then allegedly falsely tweeted that technology company Audience and biopharmaceutical company Sarepta Therapeutics faced federal investigations, which pulled down their stock respectively 28 per cent and 16 per cent.
According to the SEC, Craig faced accusation of buying and selling shares in both companies in an attempt to profit when the stock rebounded.
According to the Associated Press, Craig has been indicted by the federal grand jury, where prosecutors claimed shareholders had lost over 1.6 million dollars as a result.
Jina Choi, director of the SEC's San Francisco regional office, said, " As alleged in our complaint, Craig's fraudulent tweets disrupted the markets for two public companies and caused significant financial losses for their investors, expressandstar.com reported.
"Craig also said in later tweets that the SEC would have a hard time catching the perpetrator. As today's enforcement action demonstrates, those tweets turned out to be false as well."
FBI Special Agent in Charge David Johnson said in a statement, "This investigation dismantled a stock market manipulation scheme that operated with one goal in mind - to falsely defame a company in order to destroy its stock value for financial gain."
