A federal jury in Los Angeles convicted prominent short seller Andrew Left on Monday of securities fraud, finding that the 55-year-old founder of Citron Research used his social media following and reputation as a stock-market commentator to manipulate share prices for quick profits. The jury found Left guilty on most of the 17 counts he faced after a three-week trial in which Justice Department prosecutors argued that his bold public stock calls were designed to move prices just enough to benefit trades he had already entered or was about to exit.
“The jury got it wrong,” Left said after the verdict was announced. “Obviously, this is not the end of the road for us.” He said the verdict would have a “chilling” effect on individual traders who give “honest opinions and trade at the same time.”
Left faces sentencing on Aug. 31. The lead securities-fraud charge carries a maximum 25-year prison term. He said he plans to appeal.
Prosecutors argued during the three-week trial that Left made aggressive public calls on stocks, often on social media, and then exited his positions minutes or hours later. An expert witness testified that Left’s words carried special weight because other traders believed he had “skin in the game” when tweeting about whether a stock was overvalued or underpriced, according to the Journal.
Among the trades that led to his conviction, prosecutors said Left shorted Roku’s stock, tweeting it was “uninvestable,” then exited his position for a $700,000 profit hours later. He deleted the earlier post and wrote he was “watching Roku from the side,” prosecutors said. The jury found him guilty of defrauding investors in connection with his trading of Cronos Group, Nvidia, Tesla and American Airlines.
The jury acquitted Left on fraud counts tied to his trading of Namaste Technologies, Beyond Meat, General Electric and Luckin Coffee. A retired firefighter testified that he sold Namaste shares for a loss after Left called the company a “total joke” and told a TV interviewer he would sell Namaste shares short “until it goes to zero,” according to the Journal. The jury cleared Left of that particular fraud count.
Left founded Citron Research and gained prominence on Wall Street by researching companies, accusing them of fraud and betting their stock prices would fall. He drew wide attention after identifying problems at China Evergrande in 2012 — the company eventually defaulted on its debt and collapsed — and at Valeant Pharmaceuticals in 2015, after Left highlighted the company’s use of an undisclosed mail-order pharmacy that helped boost sales. Valeant subsequently paid a $45 million regulatory fine without admitting or denying fault, according to the Journal.
Left took the unusual step of testifying in his own defense during the trial. He said his past statements about stocks were authentic and denied trying to deceive any investors, attributing his conduct to being an active trader. He argued it was farcical to claim an individual trader could manipulate large-cap stocks like Nvidia and Tesla, pointing to their subsequent market performance as evidence his calls were accurate.
The charges did not allege Left made overt false statements, only that his tweeting and trading pattern revealed an intent to manipulate. Prosecutors said Left earned approximately $20 million in the trades at issue. He was the only trader charged through a federal investigation that began in 2018; FBI agents searched his Beverly Hills home in early 2021, shortly after he lost $20 million betting against GameStop, according to the Journal.
The verdict is a milestone for federal prosecutors who spent years investigating whether short sellers distort markets through noisy campaigns against stocks. Many of the companies targeted in the broader investigation were small firms. Left had decried the criminal case as an effort to regulate “financial influencers” and had looked for ways to gain favor with the Trump administration, though he ultimately said he wanted to be cleared by a jury, having sworn off hiring a lobbyist to get the charges dismissed, according to the Journal.