A SCOT at the centre of an international fraud investigation after he allegedly used Twitter to manipulate share prices in the US - gained to the tune of just £70, court papers claim.
James Craig, 62, from Dunragit in Dumfries and Galloway allegedly caused shareholders to lose more than $1.5m (£1m) after using the social network to spread "fraudulent" information about companies, according to the Department of Justice.
He is accused of tweeting false news designed to make share prices fall, so he could buy and resell shares for profit.
It is understood that there has been no notification to Scottish authorities of any outstanding extradition proceedings. Police Scotland confirmed they were asked by the FBI to assist with the investigation.
According to the indictment, the Scot set up Twitter accounts using names similar to real market research firms, before tweeting false news about publicly-traded securities - causing the value of the shares to slump.
Fraudulent tweets were allegedly made in 2013 about two firms Bay Area sound technology company, Audience, and a Washington-based biotech firm, Sarepta.
Craig then bought cheap securities of the targeted companies through his girlfriend’s brokerage account and later sold them at a higher prices, it is alleged.
But court papers claim Craig was too slow to cash in and profited to the tune of just $100 (£70).
The Scot has previously denied any knowledge of tweets that authorities claim were intended to manipulate stock prices, and claims he was only made initially aware of the allegations through media reports and thathe had no interest in the stock market.
The first initial case management hearing was due to be heard on Monday - but has been postponed as a new judge, Charles Breyer was reassigned the case.
Judge Breyer
Judge Breyer was an assistant special prosecutor on the Watergate Special Prosecution Force from 1973 to 1974.
The US Securities and Exchange Commission (SEC) which filed the securities fraud charges in a federal court in California state in court papers that to try and gain on the stock market movement Craig bought and sold Audience shares on January 29 and Sarepta stock on January 30.
Court papers state the Craig is alleged to have set up Twitter accounts @Mudd1Waters and @Citreonresearc to make it appear as if he was tweeting as Muddy Waters Research or Citron Research, established specialist securities research firms, it is alleged.
He is also alleged to have set up a Twitter page using the already existing logo of Muddy Waters.
It is claimed Craig would also use his own Twitter handles @dunragit and @HedgeyeAC to discuss the false Audience and Sarepta tweets.
One tweet falsely stated that the US Department of Justice was investigating Audience, according to prosecutors.
Another said that the US Food and Drug Administration had seized Sarepta drug trial papers and that certain results were tainted.
Tweets about Audience were said to have caused the share price of the company to fall 28 per cent before the Nasdaq temporarily halted trading.
Further alleged tweets about Sarepta sent stock in the firm tumbling by 16 percent.
On each occasion, Craig bought the shares around ten minutes after the share prices started falling in response to the tweets.
But the SEC say in filings: "He waited too long each time to trade the stock and therefore only profited $100 collectively from his manipulations."
But prosecutors say other shareholders who dumped their stock as the price fell ended up losing out.
The SEC claims: "Craig's false tweets and manipulative conduct caused substantial market disruption and loss, and cause Nasdaq (the major US stock exchange) to halt trading in security.
"In reaction to Craig's false and misleading tweets and the subsequent drop in price, certain Audience and Sarepta investors sold hundreds of thousands of shares during each of the temporary stock price depressions and sustained estimated losses of $1.5 million total.
"Craig's fraudulent conduct also caused tremendous intangible harm to the US markets as the unwarranted and substantial stock price drops he brought about undermine investors' confidence."
The Sunday Herald tried on three occasions to reach Craig at his home in Scotland but was told on each occasion that he was asleep.
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