Short-seller Andrew Left was convicted Monday of securities fraud for a lucrative tweet-and-trade operation — a verdict that could have consequences on Wall Street.
After two full days of deliberations, the jury found him guilty of the top count of engaging in a securities fraud scheme — manipulating the market through social media posts that spurred his followers to trade.
They also convicted him of 12 of 16 other counts related to specific trades on stocks like Tesla, Nvidia, GE, Palantir, and Meta, acquitting him of four counts.
Left’s lawyer put his hand on his client’s back as he listened to the cavalcade of “guilty” in the Los Angeles courtroom. Left took off his glasses and stared intently at the jury as the judge polled each member on whether they agreed with the verdict.
“I think the jury got it wrong and it’s not the end of the road,” Left, who appeared shaken, told reporters afterward.
“I think it’s scary,” he added. “We’re about to have the most talked about stock in the history of the stock market hit the market with SpaceX, and I think it’s chilling when you’re taking individuals and you’re limiting their ability to have free speech and trade with honest opinions.”
The 55-year-old investor and financial commentator — who made the risky move of testifying in his own defense — faces a maximum of 25 years in federal prison when he’s sentenced Aug. 31, though he’s likely to get less.
His lawyers made an immediate motion for a mistrial because jurors were initially given a verdict sheet with a count — charging him with lying to an investigator — that was thrown out by the judge before the trial. The judge did not rule on the motion.
The federal case has been closely watched because it focused on the question of what short-sellers, who bet that a stock price will fall, can say and do within the limits of the law.
Reacting to the verdict, investor Thomas Braziel posted on X that Left may have lost because he’s a short-seller.
“I have to wonder if the outcome would be the same if he was longing the stocks — humans really hate people who bet against things,” Braziel wrote. “I mean, podcasts, blogs, x handles, and investment bankers shill stuff on the long side all of the time.”
Some of the securities fraud counts Left was convicted on involved stocks that he had bet long on, though he is best known for his shorts.
Marc Cohodes, former hedge fund manager and short-seller, said in an X post that Left’s conviction “will mark the END of Smash and Grab, and Short Selling Reports” and called on the feds to “go after the real offenders of this practice.”
“I like Andrew, always have and sad to see this but I hate how these guys operate,” he wrote.
Left, the founder of Citron Research, made his name as an activist short-seller who published scathing reports about public companies, exposing mismanagement or even fraud. He also infamously shorted GameStop, unleashing rage from its fans.
Prosecutors said that he misled retail investors and hurt companies by using social media to publicize Citron reports. His tweets would lead followers to make trades based on a target price he set — while he quietly closed his own positions at a different price, they alleged. All told, he made more than $20 million in profits.
The government told the jury how Left boasted that the trades he made after putting out his market-moving reports were like “taking candy from a baby” and that he could “send a stock tumbling with a single tweet.”
In his closing argument last week, the prosecutor, Matthew Reilly, told jurors that Left was duplicitous — “tweeting with one hand and trading with the other.”
The witnesses called by the government included the CEO of a weed company whose stock tanked after Left lambasted it, and a retired firefighter who lost his investment in a company that Left publicly slammed.
Billy Banks, the firefighter who testified he lost $110,000 of his retirement funds, told Business Insider Monday evening he felt “vindicated.”
“I just feel redeemed,” he said, adding he was “devastated” when the company he invested in back in 2018 had its stock decline following Left’s comments.
“I feel good today,” Banks said. “I’m sorry he has to go to prison. I don’t want to see anybody go to prison. But I lost a lot of money, and that’s not right.”
Left testified in his own defense, which subjected him to hours of cross-examination by a prosecutor.
He maintained he wasn’t swindling investors — he was warning them about companies he believed were on shaky footing. He argued he had no legal obligation to wait until the stock hit the target price he set to make his own moves.
His attorney Eric Rosen told the jury in closing arguments: “The government wants you to convict a trader for trading like a trader… This is not a case. This is them sifting through thousands and thousands of emails to invent a case.”
The jury deliberated Friday with no verdict, then went home for the weekend. When they returned Monday, they sent out a note asking for a read-back of witness testimony. Left was not in the courthouse, sparking ire from the judge, who threatened to take him into custody if he left again.
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Kelsey is a senior reporter for Business Insider, where she covers business and tech news as well as stories about travel, luxury, and consulting.Her feature story “Disaster at 18,200 feet” received awards from the New York Press Club and the North American Travel Journalists Association, as well as honorable mention from the Society of American Travel Writers. It was also included on Longreads’ and Pocket’s best of 2022 lists. She has also received an American Journalism Online Award for her coverage on missing and murdered Indigenous people in Wyoming.She’s appeared on CBS, NPR, NBC, and other outlets to discuss her work. She previously worked on the world news desk at the BBC in London and received a master’s in journalism from Northwestern University.She can be reached by email at kvlamis@businessinsider.com or via the encrypted-messaging app Signal @kelseyv.21.Popular storiesDisaster on Denali: Inside a 1,000-foot fall on America’s highest peakThrifting is more popular than ever. It’s also never been worse.Rolex wouldn’t service the vintage watch my mom inherited. Watchmakers say it happens all the time.A tiny, invasive bug and the climate crisis are changing how guitars are made, and shifting the course of music historyThe tourism free-for-all is overGovernment-run boarding schools were founded to ‘civilize’ Native Americans. Hundreds of dead children remain buried in the schoolyard graves.Meet the Texas minister who helps fly dozens of women to New Mexico every month to get abortionsPeople are flocking to Colorado for the great outdoors, but the air pollution is so bad, it’s forcing many to stay insideInside Kabul: An aid worker reveals the devastating chaos that erupted during the US exit from Afghanistan
