US charges Scottish man over fake tweets that hurt stocks

6 Nov 2015 | Author: | No comments yet »

SEC charges Scottish trader for Twitter fraud.

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. 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. According to the Securities and Exchange Commission, James Alan Craig of Dunragit, Scotland, created two Twitter accounts made to look like the real accounts of two well-known securities research groups — Muddy Waters Research and Citron Research. 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.

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