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Scottish man used Twitter as part of failed stock market scam, says US jury Scottish man used Twitter to launch $1.6m stock market scam, says US jury
(about 4 hours later)
A Scottish man has been indicted by a federal grand jury in San Francisco for using Twitter to make bogus claims that drove down the stock prices of two companies, in an effort to profit from illegal trading.A Scottish man has been indicted by a federal grand jury in San Francisco for using Twitter to make bogus claims that drove down the stock prices of two companies, in an effort to profit from illegal trading.
James Alan Craig, 62, of Dunragit, Scotland, was charged with one count of securities fraud. A similar charge was filed by the US Securities and Exchange Commission in a related civil case.James Alan Craig, 62, of Dunragit, Scotland, was charged with one count of securities fraud. A similar charge was filed by the US Securities and Exchange Commission in a related civil case.
The charges laid on Thursday mark the latest effort by US authorities to crack down on the use of social media to commit stock market fraud.The charges laid on Thursday mark the latest effort by US authorities to crack down on the use of social media to commit stock market fraud.
Craig’s whereabouts could not immediately be determined and it was unclear whether he had hired a lawyer.Craig’s whereabouts could not immediately be determined and it was unclear whether he had hired a lawyer.
Authorities saidthat 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.Authorities saidthat 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.
Craig allegedly then falsely tweeted that technology company Audience and biopharmaceutical company Sarepta Therapeutics faced federal investigations, driving down their share prices by a respective 28% and 16%.Craig allegedly then falsely tweeted that technology company Audience and biopharmaceutical company Sarepta Therapeutics faced federal investigations, driving down their share prices by a respective 28% and 16%.
Thereafter, Craig used his girlfriend’s brokerage account to buy the companies’ shares at depressed prices, hoping to sell them later after they rebounded, authorities said.Thereafter, Craig used his girlfriend’s brokerage account to buy the companies’ shares at depressed prices, hoping to sell them later after they rebounded, authorities said.
The US justice department said the tweets cost shareholders about $1.6m of losses.The US justice department said the tweets cost shareholders about $1.6m of losses.
Nonetheless, the SEC said Craig’s effort to profit from big price swings proved “largely unsuccessful”.Nonetheless, the SEC said Craig’s effort to profit from big price swings proved “largely unsuccessful”.
Muddy Waters and Citron, which is run by the investor Andrew Left, said at the time that the suspect tweets were not theirs.Muddy Waters and Citron, which is run by the investor Andrew Left, said at the time that the suspect tweets were not theirs.
Knowles Corp bought Audience on 1 July. Audience, Sarepta and Twitter were not accused of wrongdoing.Knowles Corp bought Audience on 1 July. Audience, Sarepta and Twitter were not accused of wrongdoing.