Activist short seller Andrew Left, founder of Citron Capital LLC, has been convicted of securities fraud by a jury in Los Angeles.
U.S. authorities alleged that, between 2018 and 2023, Left used social media and his mainstream media appearances to engage in market manipulation by taking positions in certain stocks, and then disseminating commentary to drive the stock in a particular direction that would benefit those positions — before quickly reversing those positions to capture trading profits based on the stock price moves.
“Andrew Left abused his position and influence when he devised a scheme known as ‘short-and-distort,’ to manipulate the market for personal gain,” said Eric Shen, inspector in charge of the U.S. Postal Inspection Service (USPIS), in a release.
It’s alleged that the scheme generated US$21 million in illicit profits.
Left was found guilty of one count of participating in a securities fraud scheme and 12 counts of securities fraud. The jury also acquitted Left of four counts of securities fraud.
He is due to be sentenced on Aug. 31 by U.S. district judge Virginia Phillips.
In parallel with the criminal charges, Left and Citron were also charged by the U.S. Securities and Exchange Commission (SEC) for allegedly breaching securities rules by making several false and misleading statements in connection with the scheme.
Those allegations have not been proven.
In its case, the SEC’s complaint seeks permanent injunctions against Left and Citron Capital, along with disgorgement plus interest, civil monetary penalties, an officer-and-director ban and a penny stock ban.