Jul 26, 2024, 10:31 AM
Jul 26, 2024, 10:31 AM

Short Seller Andrew Left Charged with Securities Fraud

Highlights
  • Andrew Left, a prominent investor known for short selling, has been charged by the SEC and Justice Department for issuing misleading reports that allegedly manipulated stock prices, amounting to $16 million.
  • The allegations specifically relate to his actions concerning GameStop and other stocks, claiming he influenced their market performance negatively.
  • This high-profile case raises questions about market integrity and the consequences for those who attempt to manipulate stock prices.
Story

Andrew Left, founder of Citron Research, has been charged by the U.S. Department of Justice with multiple counts of securities fraud related to a $16 million stock market manipulation scheme. The charges include one count of engaging in a securities fraud scheme, 17 counts of securities fraud, and one count of making false statements to federal investigators. In a separate action, the Securities and Exchange Commission (SEC) has also charged Left with a $20 million scheme to defraud his followers through misleading stock trading recommendations. Left, a well-known short seller and frequent commentator on financial news networks, gained notoriety for his contrarian views on stocks like GameStop and Evergrande. However, regulators allege that Left and Citron exploited their influence by publishing opinions on 23 companies, which led to significant stock price movements. Following these publications, Left reportedly reversed his positions to capitalize on the price changes, profiting from the very trades he advised his followers to make. The SEC's Los Angeles regional office highlighted that Left's actions constituted a "bait-and-switch" scheme, where he misled his audience to induce trading based on false pretenses. This manipulation allegedly resulted in $20 million in profits for Left and his firm. If convicted, he faces severe penalties, including up to 25 years in prison for the securities fraud scheme count and additional time for the other charges. Citron Research has not yet responded to requests for comment regarding the allegations against Left.

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