A Scots stock market trader is facing fraud charges in the US over fake tweets authorities claim were intended to manipulate the stock prices of two companies.

James Craig, 62, allegedly made up Twitter accounts to replicated that of "well-known securities research firms", according to the US Securities and Exchange Commission (SEC). The tweets eventually costs stockholders about £1 million, according to federal law enforcement officials.

The SEC said it had filed securities fraud charges against Craig, of Dunragit, a village near Stranraer, Scotland, in a federal court in California.

Over a one week period, Craig put out information in tweets on a Bay Area sound technology company, Audience, and a Washington-based biotech firm, Sarepta, that was deliberately created to depress the value of the companies in order to profit later through his own stock sales, the indictment alleges.

Craig allegedly tweeted multiple false statements in 2013 about the companies on Twitter accounts he created to look like the real Twitter accounts of well-known securities research firms.

Craig set up on account to make it appear as if he was tweeting as Muddy Waters Research, a market research firm, it is alleged.

Several tweets, suggesting Audience was under federal investigation, were said to cause the share price of the mobile audio company to fall 28% before the Nasdaq temporarily halted trading.

Further alleged tweets that claimed Sarepta Therapuetics was also subject to an investigation sent stock in the drug firm tumbling by 16%.

When shares in the targeted companies slumped, Craig allegedly bought securities of the firms through his and later sold them at a higher price.

But the SEC said Craig's effort to profit from big price swings ultimately proved "largely unsuccessful".

Craig is accused of buying and selling shares in both companies in an attempt to profit when the stock rebounded, the SEC said.

He has been indicted by a federal grand jury in San Francisco, where prosecutors claimed shareholders had lost more than 1.6 million dollars (£1.05 million) as a result.

Jina Choi, director of the SEC's San Francisco regional office, said: "As alleged in our complaint, Craig's fraudulent tweets disrupted the markets for two public companies and caused significant financial losses for their investors.

"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."

FBI Special Agent in Charge David Johnson said in a statement: "This investigation dismantled a stock market manipulation scheme that operated with one goal in mind - to falsely defame a company in order to destroy its stock value for financial gain."

The US Attorney's Office for the Northern District of California has filed criminal charges against Craig.