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The Securities and Exchange Commission (SEC) has accused notable activist short seller Andrew Left and his firm, Citron Capital, of executing a $20 million fraudulent scheme.
Left, who has previously taken positions against Grayscale Bitcoin Investment Trust, allegedly made numerous false and misleading claims as part of a strategy to mislead his followers.
The SEC’s complaint asserts that Left, residing in Boca Raton, Florida, participated in a prolonged operation aimed at misleading his followers by spreading false and misleading information regarding his stock trading advice.
Left Utilized Citron Research Social Media to Short Stocks
According to the SEC, Left employed his Citron Research website and associated social media channels to publicly endorse long or short positions in 23 companies on at least 26 occasions.
The known Bitcoin skeptic asserted that these positions aligned with his own and those of Citron Capital. However, the complaint claims that following Left’s recommendations, the prices of the targeted stocks shifted by an average of over 12%.
Left and Citron Capital then allegedly reversed their positions to benefit from the price fluctuations they had caused. Specifically, Left would repurchase stocks immediately after advising his followers to sell and sell stocks right after recommending them to buy.
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“Andrew Left exploited his readers. He gained their trust and encouraged them to trade under false pretenses so that he could swiftly change direction and profit from the price movements following his reports,” stated Kate Zoladz, Director of the SEC’s Los Angeles Regional Office.
“We uncovered these alleged bait-and-switch tactics, which earned Left and his firm $20 million in ill-gotten gains, and we plan to hold Left and his firm accountable for their actions,” Zoladz added.
SEC Claims Left Made Multiple False Statements
The SEC’s complaint further contends that Left and Citron Capital made several false and misleading statements as part of their scheme.
For example, the defendants asserted they would maintain a long position on a target stock until the price reached $65, but began selling when the stock reached $28.
Moreover, they misrepresented Citron Research as an independent research entity that had never received payment from third parties to publish information about target companies.
In reality, the complaint alleges, the defendants had compensation agreements with hedge funds, according to the SEC.
The post SEC Charges Bitcoin Bear and Short Seller Andrew Left for $20M Fraud Scheme appeared first on Cryptonews.
