SEC charges Andrew Left and Citron Capital for $20M fraud scheme

The Securities and Exchange Commission announced charges against activist short seller Andrew Left and his firm, Citron Capital LLC, for engaging in a $20M multi-year scheme to defraud followers by publishing false and misleading statements regarding his supposed stock trading recommendations. “Andrew Left took advantage of his readers. He built their trust and induced them to trade on false pretenses so that he could quickly reverse direction and profit from the price moves following his reports. We uncovered these alleged bait-and-switch tactics, which netted Left and his firm $20 million in ill-gotten profits, and we intend to hold Left and his firm accountable for their actions,” said Kate Zoladz, Director of the SEC’s Los Angeles Regional Office. The SEC’s complaint, filed in the United States District Court for the Central District of California, charges Left and Citron Capital with violating antifraud provisions of the federal securities laws. Among other remedies, the complaint seeks disgorgement, prejudgment interest, and civil monetary penalties against Left and Citron and conduct-based injunctions, an officer-and-director bar, and a penny stock bar against Left. In a parallel action, the Fraud Section of the Department of Justice and the U.S. Attorney’s Office for the Central District of California today announced charges against Left.