The US Attorney for Northern California has indicted a Scottish man on charges that he illegally manipulated stock prices with a simple Twitter account.
According to the indictment (PDF), 62-year-old James Alan Craig created two fraudulent Twitter accounts on which he pretended to be market research firms. He then tweeted out false info about publicly traded stocks on Twitter, causing significant drops in stock prices for two companies. He then allegedly day-traded on those stocks through his girlfriend’s TradeMonster account.
The first account was called @Mudd1Waters, an imitation of Muddy Waters Research. Prosecutors say Craig also grabbed that firm’s logo and slapped it on his fake Twitter account. In a series of eight tweets published over the course of 90 minutes in January 2013, Craig falsely stated that Audience, a Bay Area sound technology company, was being investigated by the DOJ on fraud charges. Audience’s stock dropped by 28 percent. The SEC halted trading, but not before Craig bought 300 shares and added another 100 the next day.
The following day, he allegedly used an account called @citreonresearc, again using a real logo to imitate another legitimate firm, Citron Research. In another short tweet-storm, he falsely said that the FDA had seized drug trial papers from Sarepta Therapeutics, a Massachusetts-based biopharmaceutical company. He also said…