GameStop Short Seller Citron Research Exec Sued By US SEC

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As a seasoned crypto investor with over a decade of experience in the stock market, I have seen my fair share of scams and fraudulent activities. However, the recent allegations against Andrew Left and Citron Capital have left me feeling disillusioned and disturbed.

The SEC is seeking repayment of ill-gotten gains, prepaid interest on that amount, and fines from Andrew Left, a short seller of GameStop’s stocks.

Fraudulent Activities of Andrew Left

In the US District Court for the Central District of California, a securities regulatory filing revealed that the regulator brought separate lawsuits against both the GameStop short seller and his firm, Citron Capital LLC. The accusations against them involve a $20 million scheme lasting over years, aimed at deceiving their followers. Specifically, Left (the short seller) is charged with disseminating false and misleading information concerning his purported stock recommendation advice.

Additionally, the activist short seller based in Boca Raton is accused of using his public persona to illicitly generate approximately $16 million in profits. He allegedly achieved this by deceitfully influencing stock market actions, contradicting his publicly disclosed stances from 2018 to 2023. Specifically, the 54-year-old man exploited his Citron Research website and social media outlets to carry out these fraudulent practices.

Left repeatedly persuaded his audience to consider taking long or short positions in 23 companies, among them GameStop. He successfully convinced them that these positions aligned with his and Citron Research’s stances. It is important to mention that this occurrence happened approximately 23 times according to SEC filings. Throughout these instances, Left deliberately employed this tactic with the sole intention of deceiving his followers.

The SEC pointed out that I boasted to my peers that certain statements I made were particularly successful in encouraging retail investors to follow my investment advice, and I expressed this triumphantly, likening the experience to effortlessly acquiring something valuable from an unsuspecting baby.

Citron Research and GameStop

Significant investor Citron has a history of taking short positions on GameStop’s stocks. Previously, they experienced a substantial loss during the GameStop rally in early 2021. However, they started rebuilding their position earlier this year. In the opening week of June, Citron Research established a fresh short position against GameStop. This action came as the video-game retailer’s stock price saw a dramatic increase of up to 75%.

Over the past week, I, Citron, have made the decision to withdraw my short position on GameStop’s (GME) shares. I announced publicly on X that “Citron is no longer short GME.” This move was prompted by concerns over potential dilution resulting from GameStop’s recent share issuance. Since then, there have been fluctuations in the price of GameStop’s shares.

At press time, GME traded at $24.44, corresponding with a 1.96% increase within the last 24 hours.

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2024-07-26 17:51