In a significant development in the world of financial regulation, a federal judge has rejected prominent short seller Andrew Left’s bid to dismiss a U.S. Securities and Exchange Commission (SEC) civil lawsuit accusing him of fraudulently manipulating stock prices.
The ruling, reported on April 23, 2025, underscores the ongoing battle between regulators, short sellers, and retail investors, who have been increasingly vocal about market manipulation since the meme stock frenzy of 2021.
Today we’re going into the details of Left’s case, the broader context of retail investor activism, the controversial MMTLP fraud, and the expectations placed on the Trump administration to crack down on market manipulation.
Let’s get it.
Andrew Left and the SEC Fraud Allegations
Andrew Left, the founder of Citron Research, has been a polarizing figure in the financial world for over two decades.
Known for his bearish bets against companies like GameStop, Nvidia, and Tesla, Left has built a reputation as an activist short seller who publicly criticizes firms he believes are overvalued or engaging in fraudulent practices.
However, the SEC and the U.S. Department of Justice (DOJ) allege that Left’s actions went beyond legitimate short selling, accusing him of orchestrating a multiyear scheme to manipulate stock prices for personal gain.
According to the SEC’s complaint, between March 2018 and December 2020, Left and Citron Research engaged in trades involving 23 companies, including high-profile names like Roku, Meta, Alibaba, and Palantir.
The SEC claims Left used his influential platform—through social media posts and appearances on cable news channels like CNBC and Fox Business—to mislead investors about his trading positions.
For example, Left allegedly promoted long or short positions in stocks, only to quickly reverse those positions after stock prices moved, reaping profits of up to $20 million.
The SEC further alleges that Left concealed relationships with hedge funds, sharing his trading plans in exchange for compensation, and misrepresented Citron as a successful hedge fund when it had no outside investors.
The DOJ has also filed criminal charges against Left, including one count of engaging in a securities fraud scheme, 17 counts of securities fraud, and one count of making false statements to federal investigators.
If convicted, Left faces a maximum penalty of 25 years in prison for the fraud scheme, 20 years per securities fraud count, and five years for false statements.
The SEC is seeking disgorgement of profits, civil penalties, and a ban on Left serving as an officer or director of a public company.
Left’s legal team argued for dismissal of the SEC’s civil case, but the federal judge’s rejection of their motion signals that the case will proceed, with a trial potentially scheduled for September 2025.
This development has reignited discussions about the role of short sellers in financial markets and the growing frustration among retail investors who believe the system is rigged against them.
The Rise of Retail Investor Activism Post-2021 Meme Stock Frenzy
The meme stock frenzy of 2021, centered around stocks like GameStop (GME) and AMC Entertainment (AMC), marked a turning point for retail investors.
Fueled by online communities on platforms like Reddit and X, retail traders banded together to counter short-selling hedge funds, driving massive short squeezes that cost firms like Melvin Capital billions and nearly crippled Wall Streeet giant Citadel.
The movement exposed perceived vulnerabilities in the financial system, including the influence of short sellers, the role of clearinghouses, and the power of brokerages to restrict trading.
Retail investors argued that the system favored institutional players, with tactics like naked short selling, spoofing, and dark pool trading used to manipulate stock prices.
The GameStop saga, in particular, highlighted how short sellers like Left, who publicly bet against the stock, faced significant losses when retail investors coordinated to drive up share prices.
Left himself closed his GameStop position at a 100% loss in 2021, later announcing that Citron would cease publishing short-selling reports due to the backlash.
Since 2021, retail investors have continued to fight against systemic market manipulation.
Social media platforms like X have become battlegrounds for organizing campaigns, sharing research, and calling out perceived injustices.
Investors have demanded greater transparency from regulators like the SEC and the Financial Industry Regulatory Authority (FINRA), as well as stricter enforcement against manipulative practices.
The MMTLP scandal, one of the most contentious cases in recent years, has further fueled outrage.
The MMTLP Fraud: A Case Study in Market Manipulation
The MMTLP saga, involving the Series A Preferred Shares of Meta Materials Inc., is widely regarded by retail investors as one of the most egregious examples of market manipulation in recent history.
MMTLP was a preferred share dividend issued to shareholders of Torchlight Energy Resources (TRCH) in June 2021 following a merger with Metamaterial Inc.
The shares, which traded on the over-the-counter (OTC) market under the ticker MMTLP, were intended to provide value from Meta Materials’ oil and gas exploration business, which was later spun off into Next Bridge Hydrocarbons, a private company.
In November 2022, Meta Materials announced that MMTLP shares would be canceled, and shareholders as of December 12, 2022, would receive one share of Next Bridge common stock for each MMTLP share held.
Investors anticipated a potential short squeeze in the final trading days, driven by heavy buying volume and reported short interest of over 2.65 million shares.
However, on December 9, 2022, FINRA imposed a rare U3 trading halt, citing “significant uncertainty in the settlement and clearance process” due to the shares’ impending cancellation and lack of DTC eligibility.
The U3 halt effectively froze MMTLP trading, preventing shareholders from buying or selling their positions.
On December 13, 2022, FINRA delisted the MMTLP ticker, leaving approximately 65,000 investors unable to access their funds.
Some reported receiving Next Bridge shares in their brokerage accounts, but as a private company, Next Bridge shares were illiquid and lacked a public market, rendering them effectively worthless for most investors.
Some investors even questioned whether the Next Bridge shares they received were genuine, alleging the presence of “counterfeit shares” due to naked short selling and failures-to-deliver (FTDs).
Retail investors have labeled the MMTLP situation a “Wall Street fraud,” accusing FINRA and other regulators of protecting short sellers and hedge funds at their expense.
Was the U3 halt implemented to prevent a short squeeze that would have forced short sellers to cover their positions at significantly higher prices?
FINRA’s FAQ, published in March 2023 and updated in November 2023, stated that the halt was necessary to protect investors and the public interest, but investors criticized the response as “disingenuous” and lacking transparency.
Posts on X have highlighted inconsistencies in FINRA’s statements, such as claims that no trading occurred on December 9.
The MMTLP scandal has had devastating consequences for retail investors, many of whom lost their life savings or retirement funds.
The Congressional Research Service has acknowledged the issue, and campaigns like Fair Markets Now have called for investigations by the DOJ and the Department of Government Efficiency (DOGE), as well as presidential intervention to address the plight of affected investors.
Also Read: A court now calls on Citadel to appear for examination on MMTLP Case
Retail Investors’ Expectations for the Trump Administration
With the re-election of Donald Trump in 2024, retail investors are looking to his administration to take decisive action against market manipulation.
Trump’s vocal criticism of financial elites and his promises to reform regulatory agencies have resonated with retail traders, who see his presidency as an opportunity to address longstanding grievances.
Investors are particularly focused on the following areas:
- Stricter Penalties for Market Manipulation: Retail investors are urging the Trump administration to impose severe consequences for practices like naked short selling, spoofing, and FTDs. Posts on X have called for executive orders to ban these activities, with suggestions of hefty fines and criminal penalties for offenders. The appointment of Paul Atkins as SEC Chairman, announced in 2025, has raised hopes among some investors that the agency will prioritize retail investor protections.
- Increased Oversight of FINRA and the SEC: The MMTLP scandal has eroded trust in FINRA, with investors accusing the self-regulatory organization of conflicts of interest due to its funding by member firms. Legislation like the RAMS Act (H.R.2689), introduced by Rep. Lisa McClain, aims to move FINRA oversight under the SEC to enhance accountability. Retail investors are pushing for the Trump administration to support such reforms and investigate FINRA’s handling of MMTLP.
- Transparency in Market Data: Investors are demanding access to “blue sheets” and other transaction records that could reveal evidence of manipulation in cases like MMTLP. They argue that regulators like FINRA and the Depository Trust and Clearing Corporation (DTCC) have been opaque, fueling conspiracy theories and distrust. The Trump administration is seen as a potential ally in mandating greater transparency.
- Support for Retail Investor Advocacy: Campaigns on X and websites like FairMarketsNow.org have called for the Trump administration to engage directly with retail investors, potentially through town halls or task forces. Investors hope that figures like Elon Musk, who has been vocal about market fairness, and agencies like DOGE will amplify their concerns.
Also Read: Citadel, Virtu now questioned about MMTLP in latest subpoena
The Broader Implications of Left’s Case and Retail Investor Activism
The ongoing legal battle against Andrew Left is more than a single case—it’s a microcosm of the tensions between retail investors, institutional players, and regulators.
Short sellers like Left argue they play a vital role in exposing corporate fraud, but critics, including retail investors, accuse them of using “short and distort” tactics to artificially depress stock prices.
The SEC’s pursuit of Left signals a willingness to crack down on deceptive practices, but retail investors remain skeptical, pointing to cases like MMTLP as evidence of systemic bias toward powerful financial interests.
The meme stock frenzy of 2021 empowered retail investors to challenge the status quo, but it also exposed the limitations of their influence.
While they succeeded in squeezing short sellers in stocks like GameStop, subsequent events like the MMTLP halt showed how regulatory interventions can undermine their efforts.
As the Trump administration takes shape, its approach to financial regulation will be closely watched.
Retail investors are not only seeking justice for past wrongs but also structural changes to level the playing field.
Whether through tougher enforcement, legislative reforms, or increased transparency, the pressure is on to address the grievances of millions of retail traders who feel betrayed by the system.
Also Read: Citadel’s motion to dismiss has now been denied in NWBO case
Why This Matters
The rejection of Andrew Left’s motion to dismiss the SEC’s fraud lawsuit marks a critical moment in the fight against market manipulation.
For retail investors, it’s a small victory in a much larger struggle that began with the meme stock frenzy of 2021 and continues with cases like MMTLP.
The pain of MMTLP investors, who lost access to their investments due to FINRA’s U3 halt and delisting, underscores the stakes of this battle.
As retail investors turn to the Trump administration for solutions, their demands for accountability, transparency, and severe consequences for manipulators reflect a broader call for fairness in the financial markets.
The outcome of Left’s case and the administration’s response will shape the future of retail investing and the trust—or lack thereof—in America’s financial system.
Back to Daily Market News.
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Also Read: Investors now urge President Trump to investigate naked short selling in formal letter
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