How clever: and how stupid

Authorities saidthat in January 2013 Craig created Twitter accounts that appeared to belong to the influential short-selling firms Muddy Waters Research and Citron Research, carrying the handles @Mudd1Waters and @citronresearc and the logos of both companies.

Craig allegedly then falsely tweeted that technology company Audience and biopharmaceutical company Sarepta Therapeutics faced federal investigations, driving down their share prices by a respective 28% and 16%.

Thereafter, Craig used his girlfriend’s brokerage account to buy the companies’ shares at depressed prices, hoping to sell them later after they rebounded, authorities said.

The US justice department said the tweets cost shareholders about $1.6m of losses.

Nonetheless, the SEC said Craig’s effort to profit from big price swings proved “largely unsuccessful”.

Fake Twitter accounts of known short sellers is pretty goo actually. But then the stupidity. You are supposed, when rigging markets like this, to make money both ways. Go short, take the profit, and as you know it’s a scam, use the profit to go long.

But then Scots and money, eh?

6 thoughts on “How clever: and how stupid”

  1. people follow advice from Twitter? I’d throw the case out on the basis that the fools and their money were lucky to ever get together in the first place.

  2. “falsely tweeted that technology company Audience and biopharmaceutical company Sarepta Therapeutics faced federal investigations, driving down their share prices by a respective 28% and 16%.”

    This is where this falls apart. The first bit is probably true, as is the second bit, but this is not proof that the first cause the second.

    Perhaps I’m overestimating the intelligence of money managers, but it beggars belief that they would believe information released in a tweet that wasn’t backed up by an official statement.

  3. I got a phone call just the other day from some clown, with a British accent, on a NYC phone number, claiming to be in Korea, telling me he had knowledge that some energy firm has signed a deal with the government of Brazil and the deal wasn’t yet public and I should by the stock through him. Going on about how I would turn 50k into 80k in a month blah blah blah. I mentioned that it sounded illegal trading on non-public information and he insisted it isn’t because he doesn’t work for the Brazil government or for this company. Then I hung up. Sounds like one of those pump and dump scams. Fuck knows how they got my number.

  4. Bloke in Costa Rica

    The usual way is to set up some shell company, arrange straw purchases where you’re both sides of the trade to make it look like there’s actual volume, spam the bottom-feeder newsletters with a hot stock tip, wait till the price goes from 0.015¢ to 0.08¢ and then dump 800 million shares into the market. You might make a few hundred thousand a couple of times before the handcuffs go on. It’s a really stupid way of making money, even if it wasn’t illegal and scummy.

  5. To be honest there is one really confusing thing about this article.

    The last paragraph says “Knowles Corp bought Audience on 1 July. Audience, Sarepta and Twitter were not accused of wrongdoing.”

    The second sentence seems pointless. Obviously the allegations are bogus or they’d be confirmed further up the article. But nothing said about any connections between the Scottard and Knowles Corp? Maybe I’m paranoid, but it seems like it would be more sensible to explain why that absolutely isn’t the case, than reaffirm that the original allegations were bogus.

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