US charges short seller in $16M stock market manipulation scheme

By Ovunc Kutlu

ISTANBUL (AA) – The US has charged short seller Andrew Left with multiple counts of securities fraud in connection with a long-running stock market manipulation scheme that netted at least $16 million in profits.

Left, 54, a securities analyst and trader, was known for his appearances as a guest commentator on cable news channels in the US. He operated under the name Citron Research, which he used as an online moniker for publishing investment recommendations. Citron’s online presence included a website and a social media account on X, according to a statement released by the Justice Department on Friday.

"As alleged in the indictment, Left commented on publicly traded companies, asserting that the market incorrectly valued a company’s stock and advocating that the current price was too high or too low," the statement said. "The commentary routinely included sensationalized headlines and exaggerated language to maximize the reaction it would get from the stock market."

The indictment further alleges that "while Left made false representations to the public to bolster his credibility, behind the scenes, he allegedly took contrary trading positions to reap quick profits off the stocks he either promoted or pilloried through Citron."

The Treasury Department stated that Left is charged 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.

If convicted, Left faces a maximum penalty of 25 years in prison on the securities fraud scheme count, 20 years on each securities fraud count, and five years on the false statements count.

Short selling involves borrowing a security whose price is expected to fall and then selling it on the open market. The same stock is bought back later at a lower price than initially sold, allowing the seller to return the borrowed stock and pocket the difference.