Short seller Andrew Left convicted of securities fraud in California

Federal jury convicts the securities analyst and trader, who could face a maximum penalty of 25 years in prison

A federal jury in California has convicted short seller Andrew Left of securities fraud.

Left, who was a securities analyst, trader and guest commentator on television channels including CNBC and Fox Business, was charged in July 2024 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. As a short seller, Left would make money betting that stocks would fall.

The justice department said on Tuesday that Left was convicted of one count of participating in a securities fraud scheme and 12 counts of securities fraud. He is scheduled to be sentenced on 31 August. He faces a maximum penalty of 25 years in prison.

“Andrew Left used his expertise to profit at the expense of retail investors, ordinary people who owned the stocks he targeted. He callously boasted that it was like ‘taking candy from a baby’,” A Tysen Duva, assistant attorney general of the justice department’s criminal division, said in a statement. “Egregious schemes like this strike at the heart of free, fair and open markets, and warrant prosecution when they involve criminal manipulation. Investors should have confidence that US markets are safe and free from the type of deliberate manipulation that Left engaged in to enrich himself at the expense of American investors.”

The justice department previously said that Left conducted business under the name of Citron Research, which had a website that published investment recommendations. He published research on companies ranging from Tesla and GameStop to Grand Canyon Education and Peloton.

According to the indictment, Left would comment on publicly traded companies and make recommendations on the shares. The commentary often included sensationalized headlines (“Investors Peddling Themselves into Frenzy”) and exaggerated language to maximize the reaction it would get from the stock market. As alleged, 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.

The indictment further alleged that before Citron would publish its commentary, Left would create long or short positions in a public company on which he was commenting in his trading accounts and prepared to quickly close those positions after Citron’s publication and take profits on the short-term price movement caused by his commentary.