The Securities and Exchange Commission is taking aim at a new way of manipulating the stock market — by monitoring false allegations made on Twitter accounts.

The SEC filed charges in U.S. District Court on Thursday against a Scottish trader after his false tweets, using fake accounts modeled after research firms Muddy Waters and Citron Research, caused sharp drops in the stock prices of two companies.

James Alan Craig of Dunragit, Scotland, is an active trader of equities and options and was commenting on stocks through various other Twitter handles he created, including @dunragit and @HedgeyeAC, the SEC said. Craig is charged with securities fraud for tweeting multiple false statements on January 29 and 30 of 2013 about Audience Inc. and Sarepta Therapeutics Inc. SRPT, -1.60%

Audience’s share price plunged 28% as a result of tweets that falsely said the Department of Justice was investigating Audience, the SEC says. Trading was halted before the fraud was revealed and the company’s stock price recovered. Sarepta’s share price dropped 16% based on false reports that the Food and Drug Administration had seized the company’s drug trial papers and that certain trial results were tainted, the agency added. The shares recovered when the fraud was exposed. Audience Inc. was delisted in July.

Craig bought and sold shares of the target companies in an unsuccessful attempt to profit from the sharp price swings. However, the complaint says he waited too long each time to trade the stock and therefore only profited approximately $100 collectively from his manipulations. His conduct, however, “caused harm to the U.S. markets and investors by triggering significant stock price drops, which undermine investor confidence,” said the SEC’s complaint.

“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, in a statement. The SEC has issued an Investor Alert titled Social Media and Investing – Stock Rumors to warn investors about the growing use of social media to manipulate share prices.

Carson Block of Muddy Waters Research reacted to the reports with kudos for the SEC. “Hats off to the SEC for investigating these incidents. Hopefully this will dissuade others from attempting similar stunts.”

Andrew Left of Citron Research reacted only with, “Crazy stuff!”

The Guardian reported that Craig’s whereabouts could not immediately be determined.