According to TechFlow, the U.S. Securities and Exchange Commission (SEC) and the Department of Justice filed charges against Andrew Left and his company Citron Capital on Friday, alleging they were involved in a multi-million dollar fraud scheme.
The SEC charged Left and Citron Capital with issuing false and misleading stock recommendation statements between 2018 and 2020. It is alleged that Left used Citron's communications to recommend long or short positions in stocks consistent with his own positions at least 26 times, and the stock price subsequently fluctuated by an average of 12%. The SEC said that Left and his company would then do the opposite and profit from the new stock price movement, with a cumulative profit of approximately $20 million.
Kate Zoladz, director of the SEC’s Los Angeles regional office, said Left exploited readers’ trust and tricked them into making trades based on false information so that he could quickly reverse his actions and profit from price movements.
The SEC is seeking to impose various financial penalties on Left and Citron, including conduct bans, officer and director prohibitions, and penny stock trading bans. The Justice Department's allegations are similar, but put the fraud proceeds at $16 million and could lead to criminal charges against Left.
Notably, GameStop's avid fans and Roaring Kitty followers celebrated the news on social media.
