Andrew Left, founder and CEO of Citron Research
Adam Jeffery | CNBC
federal prosecutor Criminal charges have been filed against activists short seller and analysts Andrew Left Suspected of using its public platform to illegally manipulate securities and profit from it at least US$16 million stock market His activities are contrary to the positions he presented to the public between 2018 and 2023.
Left, 54, and his hedge fund Citron Capital are also separately charged in related civil fraud lawsuits. Securities and Exchange Commission.
That Civil suit filed in Los Angeles federal court Left, a Florida resident who frequently serves as a guest commentator on CNBC and other business cable news channels, Citron alleges he “engaged in a $20 million, multi-year scheme to defraud by making false and misleading statements regarding his purported stock trading recommendations.” followers.
The lawsuit accuses 23 companies of deceptive conduct on at least 26 separate occasions.
“Zuo bragged to his colleagues that some of these comments[he made]were particularly effective in inducing retail investors to trade based on his recommendations, saying it was like taking “Candy from a baby,” the SEC said in its complaint.
The company identified in criminal indictment The leftist allegedly traded in ways that were contrary to his public stance on share prices, including Nvidia, TeslaSocial Media Company X, formerly known as Twitter, Yuan, Year, beyond meat, American airlines, PalantirXL Fleet, invite, General ElectricNamaste Technologies and India Globalization Capital.
The indictment alleges that, among other things, “Left coordinated with the hedge funds to disseminate short selling reports and information to be published on Twitter, coordinated with the hedge funds regarding the timing of publication, and enabled the hedge funds to disseminate the reports after they had been disseminated.”
“In exchange for sharing the announcement of his scheme with the hedge fund prior to its public release, the hedge fund paid defendant a portion of the trading profits,” the indictment states.
Left, who lives in Boca Raton, is expected to be arraigned in Los Angeles federal court in the coming weeks on a 19-count criminal indictment, the U.S. Attorney’s Office in Los Angeles said in a statement.
He declined to comment on the indictment or the SEC complaint.
“Mr. Leif’s presence on financial television networks and his large online following provided him with a credible platform from which he could allegedly conceal his intentions and manipulate the investing public for personal gain,” FBI Los Angeles said Akil Davis, assistant director in charge of the investigative center.
The indictment alleges that Left used Citron’s online platform to comment on publicly traded companies and claimed that the market’s valuation of those companies’ stocks was either too high or too low.
“Left’s recommendations often included explicit or implicit representations of Citron trading positions and ‘target prices,’ which Defendant Left represented as his own view of the true value of the target securities,” the complaint states.
“Leff knew that his advice influenced investors’ decisions to buy and sell stocks, allowing him to manipulate the price of the targeted securities,” the indictment states.
“By using the Citron Twitter account to generate ‘catalysts’ – events that could affect stock prices – Defendant Left profited from his advance knowledge that he was about to trigger such a move in the market.”
After using his influence to manipulate stock prices, Left “closed positions to take advantage of temporary price movements caused by his public comments,” the indictment said.
The indictment and SEC complaint provide specific examples of Left’s alleged manipulation and exploitation of his connections to business media, including CNBC.
The SEC complaint alleges that in May 2019, Left and Citron Capital shorted Beyond Meat, meaning they would profit if its stock price fell.
Citron Research, another of Left’s companies, posted a negative tweet about Beyond Meat on May 17, 2019, advising readers to sell the stock and assigning it a price target of $65 per share, when the stock was selling for About $87 per share.
The tweet stated that “$BYND has become extremely stupid” and “we expect $BYND’s profits to return to $65.” “Despite his negative comments about the market, as recently as 10 days ago, Left told a colleague that he believed the price of BYND would increase, stating, ‘I think BYND will increase to 100’.
Left exited most of its short position in Beyond Meat within 7 minutes of posting the tweet, while Citron Research “completely covered its short position within 12 minutes of posting the tweet,” the complaint said.
“Later that day, before CNBC was scheduled to publish an article, a reporter emailed Left asking if he still held a trading position in BYND. In response, Left said he was ‘shorting some today.’ ,” the complaint states.
“This statement was materially false and misleading because Left had exited the majority of its short exposure and Citron Capital had sold all of its short exposure,” the complaint states. “Six minutes into this email exchange, Citron The CNBC article was preceded by additional brief exposure on BYND.”
“Within an hour, CNBC publishes article The complaint, titled “Short-sellers call Beyond Meat hype ‘extremely stupid’ and short the stock,” according to the complaint.
Left, who formerly lived in Beverly Hills, Calif., was charged in the indictment with one count of participating in a securities fraud scheme, 17 counts of securities fraud and one count of making false statements to federal investigators.
If convicted, he faces up to 25 years in prison for the securities fraud scheme alone.
