U.S. authorities have charged activist short seller Andrew Left and his firm, Citron Capital LLC, with duping investors by trading against their publicly disclosed positions in various stocks.<\/p>\n
The U.S. Securities and Exchange Commission (SEC) alleged that Left misled investors by publicly recommending trading positions on his firm’s website and through social media postings, and then traded against those positions after the stock prices moved in response to those posts.<\/p>\n
Alongside the SEC’s action, a federal grand jury in the Central District of California also returned an indictment charging Left 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.<\/p>\n
\u201cAndrew Left took advantage of his readers. He built their trust and induced them to trade on false pretenses so that he could quickly reverse direction and profit from the price moves following his reports,\u201d said Kate Zoladz, director of the SEC\u2019s Los Angeles office, in a release.<\/p>\n
\u201cWe uncovered these alleged bait-and-switch tactics, which netted Left and his firm US$20 million in ill-gotten profits, and we intend to hold Left and his firm accountable for their actions,\u201d she added.<\/p>\n
In its action, the SEC charged Left and his firm with violating antifraud provisions of the federal securities laws. It is seeking disgorgement, prejudgment interest, and civil penalties against them, along with conduct-based injunctions, an officer-and-director ban, and a penny stock ban against Left.<\/p>\n
None of the allegations have been proven, and the accused in criminal cases are presumed to be innocent.<\/p>\n
Earlier this year, the SEC settled allegations with a pair of advisory firms \u2014 Dallas-based investment advisor Anson Funds Management LP and its Toronto-based affiliate, Anson Advisors Inc. \u2014 for failing to disclose their relationship with activist short-sellers, including Left and Citron.<\/p>\n
They agreed to pay US$2.25 million to settle allegations that they violated U.S. advisor rules by failing to disclose that their investment strategy included working with publishers of short reports and trading securities discussed in those reports, and paying a share of their trading profits to short activists in exchange for advance knowledge of the short sellers’ publication.<\/p>\n
The firms settled the SEC’s charges, without admitting or denying the allegations.<\/p>\n","protected":false},"excerpt":{"rendered":"
SEC, DoJ allege Citron Research, and its founder, misled investors<\/p>\n","protected":false},"author":147314,"featured_media":490081,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2324,2312],"tags":[3440,37533,2515,2443,2572,2355,2370],"yst_prominent_words":[5849,60740,35872,31048,22064,20463,18794,18535,11717,8420,7485,7257,6501,1695,5061,4996,2113],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/490063"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/147314"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=490063"}],"version-history":[{"count":4,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/490063\/revisions"}],"predecessor-version":[{"id":490082,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/490063\/revisions\/490082"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media\/490081"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=490063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=490063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=490063"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=490063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}