A short seller now requests motion to dismiss after illegal trades and defrauding investors with false information.
Andrew Left, the founder of Citron Capital and a well-known short seller, has requested a judge to dismiss a lawsuit filed by the U.S. Securities and Exchange Commission (SEC).
The SEC alleges that Left misled investors through his social media comments, profiting millions as a result.
In a court filing, Left’s attorney, James Spertus, argued that the SEC’s case lacks merit, stating that it “fails to state a claim” because it does not present a valid theory of fraud or provide adequate facts to support the allegations.
In July, federal authorities, including the SEC and the U.S. Justice Department, accused Left of manipulating the market by making misleading claims regarding his positions in various stocks, such as Nvidia and Tesla.
According to federal authorities, Left used his social media presence and appearances on cable news to discuss his trading positions, only to swiftly reverse them, earning up to $20 million in the process.
A federal judge in Los Angeles has scheduled Left’s trial for September 30, 2025, after initially setting a trial date for September of this year.
Left, who has pleaded not guilty, has been a prominent figure among “short activists” for over a decade, claiming to bet against companies he believes are overvalued or engaging in fraudulent practices.
Neither Left’s attorney Spertus nor the SEC responded immediately to requests for comment from Reuters.
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Also Read: Barclays Is Now Fined For Illegal Swap-Reporting Manipulation
Other Regulation News Today
SEC Enforcement Chief Gurbir Grewal is now resigning this month after his role primarily in the ‘crackdown’ of cryptocurrencies.
Gurbir Grewal, the top enforcement official at the U.S. Securities and Exchange Commission (SEC), is stepping down after playing a key role in cracking down on the cryptocurrency sector and monitoring Wall Street’s use of off-channel communications, per a Bloomberg report.
Since joining the SEC in 2021, Grewal has overseen the agency’s 1,300 enforcement attorneys, leading to numerous cases against various firms and financial professionals.
He was a frequent speaker at industry events, consistently emphasizing the importance of protecting investors.
“Every day, he has focused on how to best safeguard investors and ensure compliance with our established securities laws,” stated SEC Chair Gary Gensler.
“He has led a division that has acted impartially, following the facts and the law wherever they lead.”
Grewal is leaving to pursue a position in private practice, as confirmed by an unnamed source familiar with the situation.
The SEC has had notable confrontations with the finance industry, including hedge funds, brokerages, cryptocurrency firms, as well as retail investor criticism.
Most of the efforts that Grewal helped initiate while at the SEC included legal actions against crypto exchanges for allegedly trading unregistered securities.
The SEC has taken a strong stance on finance firms using unofficial communication methods like WhatsApp.
The agency has expressed concerns about bankers conducting transactions via personal devices, which complicates regulatory oversight.
Grewal, a former federal prosecutor, has overseen investigations resulting in billions of dollars in fines related to these WhatsApp probes.
In one high-profile case, he labeled a Colorado audit firm that evaluated Donald Trump’s social media company as a “sham audit mill,” leading to $14 million in penalties against the firm and its founder.
The audit firm, BF Borgers CPA PC, did not admit to or deny the SEC’s findings.
Following Grewal’s remarks, Trump Media & Technology Group Corp. appointed a new auditor shortly thereafter.
During his time at the SEC, Grewal authorized over 2,400 enforcement actions, resulting in more than $20 billion in disgorgement, prejudgment interest, and civil penalties.
The agency also awarded over $1 billion to whistleblowers during his time.
In 2023, the SEC imposed nearly $5 billion in fines and reimbursements to investors, while its enforcement actions in fiscal 2022 led to a record $6.4 billion in penalties, per Bloomberg.
Grewal, who previously served as the attorney general of New Jersey, will officially leave the SEC on October 11.
Sanjay Wadhwa, the division’s deputy director, will take over as acting director.
Wadhwa has been with the SEC’s enforcement unit since 2003 and was ‘instrumental’ in securing a record $92.8 million penalty against a billionaire hedge fund manager for insider trading in 2011.
David Oliwenstein, a partner at Pillsbury Winthrop Shaw Pittman and former SEC enforcement attorney, noted, “For any market participants thinking Grewal’s departure indicates a softening of enforcement, that would be incorrect.
Sanjay’s approach to enforcement is just as aggressive.”
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Also Read: TD Bank Now Gets Caught With Illegal Market Manipulation
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