U.S. Department of Justice secures Andrew Left securities fraud conviction over USD 21 million short and distort scheme

The U.S. Department of Justice announced that a federal jury in Los Angeles convicted activist short seller Andrew Left of securities fraud for a long-running market manipulation scheme that generated more than USD 21 million in profits. The case centered on false and misleading online posts, public reports and media commentary that the department said Left used to move prices in publicly traded securities and profit from investors who relied on his recommendations. According to court documents and trial evidence, Left established long or short positions before making public comments, then quickly closed those positions after publication to capture short-term price moves caused by his own commentary. He also entered limit orders in the opposite direction of his public recommendations, used short-dated options expiring the same day as or within five days of publication, targeted stocks popular with retail investors, and portrayed his recommendations as independent and free of financial conflicts. The jury convicted him of one count of participating in a securities fraud scheme and 12 counts of securities fraud. Left is scheduled to be sentenced on Aug. 31. He faces a maximum penalty of 25 years in prison, with the sentence to be determined by a federal district court judge after considering the U.S. Sentencing Guidelines and other statutory factors.