A federal grand jury in California has indicted short seller Andrew Left on numerous charges of securities fraud related to an alleged $16 million stock market manipulation scheme. Left, known as a securities analyst, trader, and television commentator on networks like CNBC and Fox Business, stands accused of one count of engaging in a securities fraud scheme, 17 counts of securities fraud, and one count of making false statements to federal investigators. As a short seller, Left would profit by betting on falling stock prices.
Operating under the name Citron Research, Left had a website where he published investment recommendations. His research covered a variety of companies such as Tesla, GameStop, Grand Canyon Education, and Peloton. If found guilty, Left could face up to 25 years in prison for the securities fraud scheme count, 20 years for each securities fraud count, and five years for the false statements count.
The indictment alleges that Left would manipulate stock prices by targeting popular stocks with retail investors, posting recommendations on social media, and using sensationalized headlines and exaggerated language to influence market reactions. Before publishing commentary, Left would reportedly establish positions in the companies he intended to comment on, aiming to profit from short-term price movements after publication.
Additionally, the Securities and Exchange Commission (SEC) has levied charges against Left and Citron in connection with a $20 million fraud scheme that allegedly employed deceptive tactics to mislead investors. The SEC’s complaint accuses Left and Citron Capital of violating federal securities laws related to fraud.
According to Kate Zoladz, Director of the SEC’s Los Angeles Regional Office, Left exploited the trust of his readers, leading them to trade under false pretenses to benefit from subsequent price changes following his reports. The SEC’s complaint seeks various penalties against Left and Citron, including disgorgement, civil monetary penalties, conduct-based injunctions, and bars against trading penny stocks.
Representatives from Citron Research did not immediately respond to requests for comment. Left has reportedly moved from Beverly Hills, California, to Boca Raton, Florida. Left has faced previous allegations of misconduct, with a Hong Kong tribunal ruling in 2016 that he engaged in market misconduct by publishing false or misleading information about Chinese property developer Evergrande in 2012. Evergrande, burdened by over $300 billion in debt, recently faced insolvency and was ordered to liquidate earlier this year.
