WASHINGTON (MEDIA GENERAL) – U.S. officials filed fraud charges against a Scottish stock trader over tweets.
James Craig from Dunragit, Scotland, is accused of sending out several false statements about two companies on Twitter causing each company’s stock to tumble downward.
“Craig’s fraudulent tweets disrupted the markets for two public companies and caused significant financial losses for their investors,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office.
Craig will head to court in the Northern District of California, according to the SEC. Evidence in the case includes false tweets made about Audience Inc. and Sarepta Therapeutics Inc.
According to the Security and Exchange Commission, Craig created, “real Twitter accounts of well-known securities research firms.”
The SEC claims Craig tried to profit from the sharp rises and drops in the stocks’ prices, but was, “largely unsuccessful.”
The Securities and Exchange Commission offered some red flags you can check before believing stock information you read online:
Limited history of posts. Fraudsters can set up new accounts specifically designed to carry out their scam while concealing their true identities. Be skeptical of information from social media accounts that lack a history of prior postings or sending messages.
Pressure to buy or sell RIGHT NOW. Take the time to research the stock before you invest. Be skeptical of messages urging you to buy a hot stock before you “miss out” or to sell shares of a stock you own before the price goes down after negative news is announced. Be especially wary if the promoter claims the recommendation is based on “inside” or confidential information.
Unsolicited investment information or offers. Fraudsters may look for victims on social media sites, chat rooms, and bulletin boards. Exercise extreme caution regarding information provided in new posts on your wall, tweets, direct messages, e-mails, or other communications that solicit an investment or provide information about a particular stock if you do not personally know the sender (even if the sender appears connected to someone you know).
Unlicensed sellers. Federal and state securities laws require investment professionals and their firms who offer and sell investments to be licensed or registered. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms. Check license and registration status by searching the SEC’s Investment Adviser Public Disclosure (IAPD) website or the Financial Industry Regulatory Authority (FINRA)’s BrokerCheck website.
