TechFlow news: The U.S. Securities and Exchange Commission (SEC) and the Department of Justice filed charges on Friday against Andrew Left and his firm Citron Capital, accusing them of a multimillion-dollar fraud scheme.
The SEC alleges that Left and Citron Capital issued false and misleading stock recommendations between 2018 and 2020. According to the complaint, Left leveraged Citron’s communications at least 26 times to recommend long or short positions in stocks that aligned with his own holdings. Following these recommendations, the targeted stocks reportedly moved an average of 12%. The SEC claims that Left and his company then reversed their positions to profit from the resulting price movements, amassing approximately $20 million in illicit gains.
Kate Zoladz, Director of the SEC's Los Angeles Regional Office, stated that Left exploited his readers' trust by inducing them to trade based on false information, allowing him to quickly take opposing positions and profit from the ensuing price changes.
The SEC is seeking various financial penalties against Left and Citron, including injunctions, officer-and-director bars, and a prohibition on participating in penny stock transactions. The Department of Justice's allegations are similar but estimate the fraudulent proceeds at $16 million, potentially exposing Left to criminal charges.
Notably, GameStop enthusiasts and followers of Roaring Kitty celebrated the news on social media.
