Prominent Short Seller Andrew Left Charged with Securities Fraud: Allegedly Manipulated Stock Market for $16 Million Profit

Los Angeles, California United States of America
Allegedly manipulated stock market for $16 million profit
Federal prosecutors and SEC filed charges against Left and Citron Capital
Manipulated stock prices through recommendations on cable news and research reports
Netted at least $20 million in profits from schemes
Prominent short seller Andrew Left charged with securities fraud
Prominent Short Seller Andrew Left Charged with Securities Fraud: Allegedly Manipulated Stock Market for $16 Million Profit

A prominent short seller, Andrew Left, has been charged with securities fraud by federal prosecutors in California and the Securities and Exchange Commission (SEC). The charges allege that Left manipulated the stock market using his vast following to net at least $16 million in profits.

Left, who is also known for his firm Citron Research, was a frequent guest commentator on cable news channels such as CNBC, Fox Business, and Bloomberg Television. He used his platform to recommend long or short positions in various companies and published research reports on firms including GameStop, Tesla, Twitter (Meta), Meta, Roku, Beyond Meat, American Airlines, Palantir, XL Fleet, Invitae Corporation, General Electric, Nvidia, and others.

After publishing his opinions on these companies and observing significant price movements in their stocks following his recommendations, Left quickly reversed positions to profit from the market reaction. The SEC alleges that this scheme netted him and Citron Capital $20 million in profits.

Left is charged 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. Each securities fraud count carries a maximum prison sentence of 20 years.

The SEC also accused Left and Citron Capital of running a separate $20 million scheme to defraud their social media followers by publishing false and misleading reports about their stock trading recommendations.

Left, who has been known for his contrarian investment calls on stocks such as GameStop and Chinese property developer Evergrande, did not immediately respond to requests for comment.

The charges against Left come amid increased scrutiny of short sellers by regulators over potential market manipulation. For years, criminal prosecutors in Washington and Los Angeles and investigators for the SEC have been probing short sellers on this issue.


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Confidence

91%

Doubts
  • Are there any potential counterarguments or defenses from Left or Citron Capital?
  • Is the SEC's case against Left and Citron Capital strong enough to secure a conviction?

Sources

95%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Activist Short Seller Charged for $16M Stock Market Manipulation Scheme

Department of Justice Friday, 26 July 2024 11:18
  • Unique Points
    • A federal grand jury in the Central District of California returned an indictment charging Andrew Left with securities fraud for a market manipulation scheme reaping profits of at least $16 million.
    • 'Citron Research' and was a securities analyst, trader, and frequent guest commentator on cable news channels such as CNBC.
    • Left established long or short positions in the public company before publishing commentary and prepared to quickly close those positions post-publication to take profits on the short-term price movement caused by his commentary.
    • Left lied to law enforcement about Citron's financial relationships with a hedge fund and coordinated trading with a hedge fund in advance of the issuance of its commentary.
  • Accuracy
    • Andrew Left conducted business under the name 'Citron Research' and was a securities analyst, trader, and frequent guest commentator on cable news channels such as CNBC.
    • Left commented on publicly traded companies and advocated that the current price was too high or too low with explicit or implicit representation about Citron’s trading position.
    • Left allegedly used advance knowledge and control over the timing of a market-moving event to build his positions using inexpensive, short-dated options contracts that expired from the same day he published his commentary.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (85%)
    The author makes several appeals to authority by mentioning CNBC, Fox Business, and Bloomberg Television as platforms where the subject of the article, Andrew Left, was a frequent guest commentator. This creates an impression that Left's opinions hold some weight due to his association with these reputable news outlets. Additionally, there are instances of inflammatory rhetoric used in the headlines and throughout the text to grab attention and manipulate reader emotions.
    • > A prominent activist short seller
    • reaping profits of at least $16 million.
    • Left conducted business under the name “Citron Research” (Citron)
    • As alleged in the indictment, Left commented on publicly traded companies, asserting that the market incorrectly valued a company’s stock and advocating that the current price was too high or too low.
    • Sometimes, the commentary represented Left’s own work. Other times, Left disseminated the commentary of third parties as his own.
    • The commentary routinely included sensationalized headlines and exaggerated language to maximize the reaction it would get from the stock market.
    • As further alleged in the indictment, Left knowingly exploited his ability to move stock prices by targeting stocks popular with retail investors and posting recommendations on social media to manipulate the market and make fast, easy money.
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (0%)
    None Found At Time Of Publication

83%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Short seller Andrew Left of Citron charged with fraud by prosecutors, SEC

CNBC News Dan Mangan Friday, 26 July 2024 12:22
  • Unique Points
    • Andrew Left, founder and CEO of Citron Research, has been criminally charged with securities fraud by federal prosecutors.
    • Left allegedly used his public platform to manipulate stock market activity contrary to his presented positions from 2018 through 2023.
    • The SEC accused Left and Citron of engaging in a $20 million multi-year scheme to defraud followers by publishing false and misleading statements.
    • Left is charged with fraudulently trading on at least 23 companies on at least 26 separate occasions.
    • He allegedly coordinated with hedge funds regarding the timing of publication and shared his planned announcements in advance for a portion of their trading profits.
    • The indictment identifies companies including Nvidia, Tesla, Twitter (Meta), Meta, Roku, Beyond Meat, American Airlines, Palantir, XL Fleet, Invitae, General Electric...
  • Accuracy
    No Contradictions at Time Of Publication
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (15%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

75%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

US prosecutors charge famed short seller Andrew Left with fraud

Fox Business Network Megan Henney Friday, 26 July 2024 17:59
  • Unique Points
    • Andrew Left, a prominent short seller, has been charged with fraud by federal prosecutors.
    • ,
  • Accuracy
    • If convicted, Left faces a maximum penalty of 25 years in prison on the securities fraud scheme count.
  • Deception (0%)
    The article by Megan Henney contains several examples of deception. Firstly, she uses the phrase 'prominent short seller' multiple times to editorialize and manipulate the reader's emotions towards Andrew Left. Secondly, she quotes Kate Zoladz from the SEC stating that Left 'took advantage of his readers' which is an emotional manipulation and a clear statement of opinion. Thirdly, Henney selectively reports details about Left's past actions to support her negative portrayal of him without disclosing all relevant information. For instance, she mentions that he has published research on companies including GameStop, Peloton, Tesla and China's Evergrande but fails to mention that many of his predictions have been accurate. Lastly, the article implies that Left's actions are illegal and fraudulent without providing any evidence or linking to peer-reviewed studies which have not been retracted.
    • The Securities and Exchange Commission also filed charges against Left and his firm, Citron Capital, accusing them of ‘engaging in a $20 million multi-year scheme to defraud followers by publishing false and misleading statements regarding his supposed stock trading recommendations.’
    • Authorities alleged that Left used his Citron Research website and social media platforms to recommend taking long or short positions in 23 companies, telling followers the positions were consistent with his own.
    • For years, criminal prosecutors in Washington and Los Angeles and investigators for the SEC have been probing short sellers over potential market manipulation.
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

78%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

U.S. charges short seller Andrew Left of Citron Research in $16 million stock manipulation scheme

CBS News Site: https://www.cbsnews.com/articles/about-us/ Aimee Picchi Friday, 26 July 2024 17:59
  • Unique Points
    • Andrew Left, founder of Citron Research, has been charged by the US Department of Justice with securities fraud for a $16 million stock market manipulation scheme.
    • Left is charged 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.
    • Short seller Andrew Left built a following for his contrary calls on stocks such as GameStop and Chinese property developer Evergrande.
    • After publishing opinions on 23 companies whose stock prices moved significantly, Left quickly reversed positions to profit from those price moves netting $20 million in profits.
  • Accuracy
    • Andrew Left built a following for his contrary calls on stocks such as GameStop and Chinese property developer Evergrande.
  • Deception (0%)
    The author, Aimee Picchi, uses sensational language in the title and body of the article to manipulate emotions and grab the reader's attention. She also selectively reports information by only mentioning Left's alleged wrongdoings without providing any context or balance. The article does not disclose any sources.
    • Edited By Anne Marie Lee Updated on: July 26, 2024 / 10:33 AM EDT / CBS News
    • But securities regulators allege that after Left and Citron published opinions on 23 companies whose stock prices subsequently moved more than 12% on average, they quickly reversed their positions to profit from those stock moves.
    • If convicted, Left faces a maximum penalty of 25 years in prison on the securities fraud scheme count, 20 years in prison on each securities fraud count, and five years in prison on the false statements count.
    • Prominent short seller Andrew Left, the founder of Citron Research, has been charged by the U.S. Department of Justice with multiple counts of securities fraud for a $16 million stock market manipulation scheme.
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

94%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

US prosecutors charge prominent short-seller with fraud

CNN News Site: In-Depth Reporting and Analysis with Some Financial Conflicts and Sensational Language Allison Morrow Friday, 26 July 2024 13:28
  • Unique Points
    • Federal prosecutors in California charged Andrew Left with multiple counts of securities fraud involving a long-running market manipulation scheme, yielding at least $16 million in profit.
    • ,
  • Accuracy
    • Andrew Left, founder of Citron Research, exploited his ability to move stock prices using social media to amplify and exaggerate market reactions.
    • Left's investing style is known as short-selling. He was charged 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 SEC accused Left and his firm of running a $20 million scheme to defraud social media followers by publishing false and misleading reports.
    • Citron Research had a notable win in 2015 when it bet against Canadian pharmaceutical giant Valeant, accusing it of creating fraudulent invoices. The company was later investigated by the SEC, leading its stock to plummet 90% from its peak.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (85%)
    The article contains an example of a dichotomous depiction and an appeal to authority. It presents the charges against Andrew Left as proven facts without providing his side of the story, creating a false dichotomy between him and investors who follow his research. Additionally, it references Citron's past successes in uncovering fraudulent companies as evidence of their credibility, which is an appeal to authority.
    • . . . federal prosecutors in California on Friday charged prominent investor Andrew Left with multiple counts of securities fraud . . .
  • Bias (95%)
    The author, Allison Morrow, presents the facts of the case without demonstrating any bias towards or against Andrew Left. However, she does use language that could be perceived as negative towards Left and his firm Citron Research when she mentions their 'notable win' in 2015 and their goal to provide 'truthful information in an entertaining format.' This language is not biased but rather descriptive. However, the author does quote Citron's website which states that 'it is obvious that the vast preponderance of companies covered in the archived reports performed poorly as investments.' This statement could be perceived as a negative generalization about the companies Citron has covered and could potentially reflect a bias against those companies. Therefore, while there is no overt bias in this article, there are some elements that approach the threshold for bias.
    • “It is obvious that the vast preponderance of companies covered in the archived reports performed poorly as investments.”
    • Site Conflicts Of Interest (100%)
      None Found At Time Of Publication
    • Author Conflicts Of Interest (100%)
      None Found At Time Of Publication