Andrew Left, the founder of Citron Research, speaks during the Reuters Global Investment 2019 Outlook Summit, in New York, U.S., November 12, 2018. REUTERS/Brendan McDermid
Prominent short seller and Wall Street commentator Andrew Left has been hit with criminal charges for allegedly running a $16 million market manipulation scheme, according to the Justice Department. Left, 54, of Boca Raton, Florida, is accused of using his position as an investing pundit on major TV networks to illicitly profit from bets on stocks, including Nvidia and Tesla.
Federal prosecutors have charged Left with one count of engaging in a securities fraud scheme, 17 counts of securities fraud, and one count of making false statements to federal investigators. The US Attorney’s Office in Los Angeles revealed that Left is expected to be arraigned in the coming weeks, following his indictment by a federal grand jury on Thursday.
The Justice Department stated that Left would comment on publicly traded companies, asserting that the market had incorrectly valued a company’s stock and advocating for the stock’s price to be adjusted. These commentaries often included sensationalized headlines and exaggerated language to maximize their impact on the stock market. Allegedly, Left would establish long or short positions in the companies he commented on in his trading accounts, and then quickly close those positions after publication to profit from the resulting short-term price movement.
In addition to the criminal charges, Left and his firm Citron Capital are also facing a civil fraud action filed by the Securities and Exchange Commission (SEC). The SEC alleges that Citron Capital engaged in a $20 million multi-year scheme to defraud followers by publishing false and misleading statements regarding Left’s stock trading recommendations. The complaint further claims that Left directed this trading to derive short-term profits through his personal accounts and those in the name of Citron Capital.
Citron Research, a market commentary website run by Left, has been known for its claims of identifying fraud and terminal business models. The website aims to provide truthful information in an entertaining format to the investing public.
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While it is concerning to see individuals involved in market manipulation schemes, it is important to remember that this is not representative of the entire short-selling community or Wall Street as a whole. Andrew Left's alleged actions should not be used to paint all short sellers with the same brush. Short selling plays a crucial role in the market by providing liquidity and acting as a check on overvalued stocks. It is essential to differentiate between those who engage in illegal activities and the majority of short sellers who operate within the