U.S. charges Scottish man over fake
tweets that hurt stocks
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[November 06, 2015]
By Jonathan Stempel
(Reuters) - A Scottish man has been
indicted by a federal grand jury in San Francisco for posing on Twitter
as influential short-selling firms and sending bogus tweets that drove
down the stock prices of two companies, in an effort to profit from
illegal trading.
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The U.S. Department of Justice said James Alan Craig, 62, of
Dunragit, Scotland, was charged with one count of securities fraud.
A similar charge was filed by the U.S. Securities and Exchange
Commission in a related civil case.
Thursday's charges mark the latest effort by U.S. authorities to
crack down on using social media to commit stock market fraud.
Craig's whereabouts could not immediately be determined and it is
unclear whether he has hired a lawyer.
Authorities said Craig in January 2013 created Twitter accounts that
appeared to belong to Muddy Waters Research and Citron Research,
carrying the handles @Mudd1Waters and @citronresearc and the logos
of both firms.
![](http://archives.lincolndailynews.com/2015/Nov/06/images/ads/current/ldn_sda_062409.png) Craig allegedly then falsely tweeted that technology company
Audience Inc and biopharmaceutical company Sarepta Therapeutics Inc
faced federal investigations, driving down their share prices by a
respective 28 percent and 16 percent.
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 Justice Department said the tweets cost shareholders about $1.6
million of losses.
Nonetheless, the SEC said Craig's effort to profit from big price
swings ultimately proved "largely unsuccessful."
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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 July 1. Audience, Sarepta and
Twitter Inc are not accused of wrongdoing.
The criminal case is U.S. v. Craig, U.S. District Court, Northern
District of California, No. 15-cr-00517.
(Reporting by Jonathan Stempel in New York; Editing by Chris Reese
and Tom Brown)
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