Scottish trader charged over £1m US stock exchange fraud

6 Nov 2015 | Author: | No comments yet »

SEC charges Scottish trader for Twitter fraud.

SAN FRANCISCO (AP) – A federal grand jury in San Francisco indicted a Scottish man on Thursday for securities fraud after prosecutors say he manipulated stock prices using Twitter.US regulators have filed fraud charges against a Scottish trader who allegedly used Twitter to cause price swings in two companies in a bid to profit from the moves.

James Alan Craig, 62, of Dunragit, Scotland, set up Twitter accounts in 2013 that appeared to be associated with real market research firms before sending out false Tweets that sent companies’ stock prices plunging, prosecutors said. The alleged use of false tweets as a means of manipulating prices comes just days after a US trader was found guilty of “spoofing”, or rapidly placing orders with the intent to cancel them before they trade in order to trick other investors by creating the illusion of demand.

He then “tweeted multiple false statements” saying two companies were under investigation. “As alleged in our complaint, Craig’s fraudulent tweets disrupted the markets for two public companies and caused significant financial losses for their investors,” said Jina Choi, director of the SEC’s San Francisco Regional Office. In a somewhat uncharacteristic segue into humour by the watchdog, Ms Choi added: “Craig also said in later tweets that the SEC would have a hard time catching the perpetrator. Craig targeted the San Francisco Bay area sound technology company Audience and the Washington-based biopharmaceutical firm Sarepta, prosecutors said.

He is accused both times of using his girlfriend’s TradeMonster account to purchase shares in the companies and then later selling them at a higher price.

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