James Alan Craig, of Dunragit, Scotland, is accused of tweeting multiple false statements about the companies using Twitter accounts designed to look like those of well-known securities research firms, the SEC said.
The first of these tweets, ostensibly from securities research firm Muddy Waters, caused the share price of a company called Audience to fall 28% before Nasdaq temporarily halted trading, the SEC said.
The following day, further tweets about Sarepta Therapeutics, purporting to be from securities research firm Citron Research, caused a 16% fall in that company's share price.
On each occasion Craig used the research firms' logos and similar twitter handles. He then bought and sold shares in what the SEC said was a "largely unsuccessful" effort to profit from the price swings he had caused.
Craig went on to send further tweets, using aliases, to boast that it would be hard for the SEC to find who sent his initial tweets.
"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 office.
"Craig also said in later tweets that the SEC would have a hard time catching the perpetrator. As today’s enforcement action demonstrates, those tweets turned out to be false as well," Choi said.
The SEC is seeking a permanent injunction against future violations, payback of any illegal profits made and a fine.
The SEC has also issued an investor alert called Social media and Investing – Stock Rumors, which warns investors about fraudsters who attempt to manipulate share prices using social media, and gives tips for checking for signs of fraud.