Andrew Left, a well-known short seller and founder of Citron Capital, has been charged with securities fraud by federal prosecutors and the Securities and Exchange Commission (SEC). The charges allege that Left used his public platform to manipulate stock market activity, illegally profiting to the tune of at least $16 million from 2018 through 2023.
The U.S. Attorney's Office in Los Angeles announced that Left, 54, of Boca Raton, Florida, will be arraigned in the coming weeks on a 19-count criminal indictment. 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. If convicted, Left faces a maximum sentence of 25 years in prison for the securities fraud scheme alone.
In a parallel action, the SEC has filed a civil fraud complaint against Left and Citron Capital. The SEC's complaint accuses Left of engaging in a $20 million multi-year scheme to defraud his followers by publishing false and misleading statements regarding his stock trading recommendations. The complaint alleges that Left used sensationalized headlines and exaggerated language to manipulate the market and deceive investors.
"Mr. Left's presence on financial television networks and his significant online following provided him with a credible platform to allegedly disguise his intentions and manipulate the investing public for personal gain," said Akil Davis, the Assistant Director in Charge of the FBI's Los Angeles Field Office, in a statement.
According to the indictment, Left frequently commented on publicly traded companies, claiming that their stock prices were incorrectly valued by the market. His recommendations were often broadcast on cable business news channels, his X social media account, and Citron's website. The Justice Department stated that his commentary routinely included sensationalized headlines and exaggerated language designed to maximize the reaction from the stock market.
"Left's actions not only deceived investors but also undermined the integrity of our financial markets," said U.S. Attorney Martin Estrada. "We will continue to hold accountable those who manipulate the market for their personal gain."
The SEC's complaint further details how Left allegedly used his platform to influence stock prices contrary to the positions he publicly advocated. The agency claims that Left's statements were intended to create panic or excitement among investors, thereby allowing him to profit from the subsequent market movements.
"The commentary routinely included sensationalized headlines and exaggerated language to maximize the reaction it would get from the stock market," the Justice Department said.
Left, who previously resided in Beverly Hills, California, has declined to comment on the charges. His attorney has yet to release a statement regarding the indictment and the SEC complaint.
The case against Left highlights the ongoing scrutiny of market influencers and the impact of their public statements on stock prices. The charges come amid increased regulatory focus on the activities of short sellers and other market participants who use their platforms to sway public opinion and market activity.
"This case serves as a reminder that those who seek to manipulate the market for personal gain will be held accountable," said SEC Enforcement Director Gurbir Grewal. "We are committed to protecting investors and maintaining the integrity of our financial markets."
