I always wondered why guys like Left got away with, what is on its face, stock manipulation.
From the Wall Street Journal, July 26:
Citron founder manipulated stocks by issuing misleading research reports that led to quick trading profits, prosecutors allege
Federal prosecutors on Friday charged famed short seller Andrew Left with fraud, accusing him of routinely making exaggerated or misleading statements about stocks to quickly profit on price moves caused by his reports.
The charges mark a major turn of fortune for the bombastic investor, who called his firm Citron Research because it analyzes the “lemons” of the stock market. He scored a major hit a decade ago with well-timed bets against onetime highflier Valeant Pharmaceuticals International but hadn’t matched that success more recently.
An indictment returned by a Los Angeles grand jury accused Left of essentially trading on his name and reputation, announcing his bets and naming price targets far from where a stock was trading. Left quickly closed his positions after his statements caused prices to move in the direction he wanted, the indictment says.
An attorney for Left didn’t immediately return messages seeking comment.
His appearances on cable news networks and statements on social media magnified the impact of his reports and caused others to follow his bets, according to prosecutors.Left “used his platform as a securities commentator to manipulate the markets and enrich himself in the process,” said Los Angeles U.S. Attorney Martin Estrada, whose office brought the case.
The Securities and Exchange Commission also sued Left and Citron in Los Angeles federal court, accusing him of civil securities fraud.
Left, who operated out of Los Angeles for most of his career, faces criminal charges of securities fraud and lying to federal investigators. The indictment says he manipulated the prices of at least 15 stocks over a five-year period, earning illegal profits of $16 million. He sometimes suggested stock prices would fall by 50% or more but closed his positions after share prices had moved only a couple of percent, according to the indictment.
In an interview with The Wall Street Journal in 2015, Left said he tried to make Citron’s research more appealing than the typical Wall Street fare. “Sometimes you have a great story and the biggest challenge is, ‘How do I get people to read it?’ ” Left said at the time. “Wall Street research is painfully boring. I enjoy being entertaining.”
Many stocks that Left alleged to be powered by fraud later became targets of regulators. More than 50 companies covered by Citron Research were the subject of regulatory investigations, lawsuits or exchange delisting since 2001, his website says. He was sometimes right when he accused companies of questionable or fraudulent practices.
His work on drug giant Valeant, which questioned how it used a network of pharmacies it controlled, was largely on the mark. An executive at Valeant was later convicted of involvement in a kickback scheme that funneled business to the pharmacies.
Left’s indictment caps a three-year effort by the Los Angeles U.S. Attorney’s Office and fraud-section prosecutors in Washington, D.C., to examine the tactics short sellers use to instigate and then profit from a stock’s decline. Short sellers borrow shares from other investors and then sell them, in hopes that they can buy them back cheaper later and pocket the difference.
The Justice Department seized hardware, trading records and private communications as prosecutors looked for wide-ranging conspiracies and evidence of market manipulation, The Wall Street Journal reported two years ago....
....MUCH MORE
HT that the story was out there, ZeroHedge.
One recent short seller that we commented on: ""Hindenburg Research Targets Equinix In New Short Report Claiming Data Center Firm Is Selling 'AI Pipe Dream' (UPDATED)" EQIX"
And some previous posts on Citron, apparently I was trying to start a fight and maybe get some sweet, sweet legal discovery:
2017: "As NVIDIA Hits Intraday and Closing All-Time Highs Citron's Mr. Left Has a New Tactic (NVDA)"
2017: "NVIDIA: How Have Citron Research's Previous Tweets Affected Their Targets? (NVDA; TSLA)"
2017: Another Huge Miss From Citron and Andrew Left: Who Is This Guy? (TSLA; NVDA; MBLY; CC)
What the Hell?
At $186 the guy says Tesla is going to $100, it's at $281.
At $119 he says NVIDIA is going to $90 gets the initial drop and chickens out. Today the stock is at $108.
He says he's switching the short from NVIDIA to Mobileye with a $35 target.
17 days later MBLY agrees to be acquired by Intel at $63.54.
We have many more posts on Citron and Left including the 2022 investigations:
"FBI Raids and Subpoenas Have Been Occurring on Wall Street. What’s Up?"