A Scottish citizen who allegedly tweeted false information about publicly traded companies causing over a million dollars of losses has been indicted for securities fraud by a federal grand jury in San Francisco.
According to the indictment, James Craig, 62, of Dunragit, Scotland, is alleged to have set up accounts at Twitter using names similar to real market research firms to drive down stock prices in certain firms which he then bought and sold on the bounce back. Craig’s actions are alleged to have caused losses to shareholders in excess of $1.6 million.
Craig is alleged to have set up a Twitter account with the handle @Mudd1Waters, using a logo of the market research firm Muddy Waters Research as a profile picture and adding the name of a founder of the firm as the account handle. According to the indictment, he then used the account to publish materially false information about Bay Area sound technology company Audience that sent its shares into a tailspin. Craig is alleged to have snapped up 400 of the firm's shares at the bottom of the market and then sold them on later for a profit when the price stabilised.
The charge sheet describes a similar scheme involving the Washington-based biopharmaceutical firm Sarepta, using the Twitter hadle @citreonresearc.
“The allegations in this indictment describe a significant stock price manipulation committed through the use of social media,” says Acting United States Attorney Brian Stretch. “This prosecution makes clear that we will find and prosecute those who commit fraud on our stock exchanges, by any means, no matter where they reside.”
Craig has been charged with a single count of securities fraud, in violation of Title 18, United States Code, Section 1348. The Securities and Exchange Commission has filed a separate complaint charging Craig with securities fraud.
He faces a maximum sentence of 25 years’ imprisonment and a fine of $250,000, plus restitution if found guilty.