US Markets
Friday, July 26th, 2024 1:48 pm EDT
Key Points
- Criminal and Civil Charges Against Andrew Left: Federal prosecutors charged activist short seller and analyst Andrew Left with securities fraud for allegedly manipulating stock market activity for personal profit. He and his hedge fund, Citron Capital, also face a related civil fraud action by the SEC for defrauding followers with false and misleading trading recommendations.
- Allegations of Misleading Statements: The SEC’s civil complaint accuses Left and Citron of a $20 million multi-year scheme involving fraudulent conduct related to 23 companies on at least 26 occasions. The complaint claims Left bragged about the effectiveness of his misleading statements in inducing retail investors to trade.
- Potential Penalties and Court Proceedings: Left, a 54-year-old Boca Raton resident, is charged with a 19-count criminal indictment, including one count of engaging in a securities fraud scheme, 17 counts of securities fraud, and one count of making false statements. He faces a potential maximum sentence of 25 years for the securities fraud scheme alone if convicted.
Federal prosecutors have criminally charged the activist short seller and analyst Andrew Left with securities fraud related to allegedly using his public platform to illegally profit to the tune of at least $16 million from manipulating stock market activity contrary to positions he presented to the public from 2018 through 2023.
Left and his hedge fund Citron Capital also were separately charged in a related civil fraud action by the Securities and Exchange Commission.
That civil complaint in Los Angeles federal court accused Left and Citron of “engaging in a $20 million multi-year scheme to defraud followers by publishing false and misleading statements regarding his supposed stock trading recommendations.” The action alleges fraudulent conduct relating to 23 companies on at least 26 separate occasions.
“Left bragged to colleagues that some of these statements [he made] were especially effective at inducing retail investors to trade based on his recommendations and said that it was like taking ‘candy from a baby,’ ” the SEC alleged in that complaint.
The companies identified in the criminal indictment as ones Left allegedly traded on in ways contrary to his public stances on their stock prices included Nvidia, Tesla, the social media company X, formerly known as Twitter, Meta, Roku, Beyond Meat, American Airlines, Palantir, XL Fleet, Invitae, General Electric, Namaste Technologies, and India Globalization Capital.
Left, a 54-year-old resident of Boca Raton, Florida, is expected to be arraigned in the next several weeks in Los Angeles federal court, where he’s charged in a 19-count criminal indictment, the U.S. Attorney’s Office in L.A. said in a statement.
He declined to comment on the indictment and SEC complaint.
The indictment notes that Left is a frequent guest commentator on CNBC and other business cable news channels.
“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.
The indictment says that Left used Citron’s online platform to comment on publicly traded companies and claim that their stock was incorrectly valued by the market, either too high or too low.
“Left’s recommendations often included an explicit or implicit representation about Citron’s trading position and a ‘target price,’ which defendant Left represented as his own view of the Targeted Security’s true value,” the indictment says.
Left, who previously lived in Beverly Hills, California, is charged in the indictment 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.
If convicted, he would face a maximum possible sentence of 25 years in prison for the securities fraud scheme alone.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/07/26/short-seller-andrew-left-charged-with-fraud-by-prosecutors-sec.html
