Short Sellers At Risk As U.S. Sues Andrew Left For Fraud

Trampled by markets and attacked by angry executives, short sellers now find themselves confronting their biggest worry yet: the US government, Tom Schoenberg and Katherine Burton reported for Bloomberg News.

The SEC accused Left of generating $20 million in profits from illegal trading involving almost two dozen companies. I Photo: Citron Research

Fresh accusations by federal authorities that one of the industry’s most prominent players, Andrew Left, committed securities fraud are sending shock waves across the already shrinking field of investors who specialize in betting against specific stocks, the Associated Press (AP) also reported.

The US government has spent years digging into the industry’s practices, but as inquiries by the Justice Department and the Securities and Exchange Commission (SEC) went quiet in recent months, many began assuming the probes had fizzled, Stephanie Stoughton also reported for Bloomberg News.

Even Left, who pulled back after investigators seized his computers and phones, got back into the game.

That all changed Friday as prosecutors announced criminal charges against him while the SEC brought a civil lawsuit — cases that could upend his firm, Citron, and send him to prison for years.

The SEC accused Left of generating $20 million in profits from illegal trading involving almost two dozen companies.

Aimee Pichi reported for CBS News that the Justice Department charged 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.