Short seller Andrew Left testified Tuesday that his public statements about companies never contradicted his actual trading positions, challenging a central claim in the government’s securities fraud case against him.
Left, founder of Citron Research, faces charges of using social media posts to illegally move stock prices for profit. He told jurors in Los Angeles federal court that he never spoke negatively about companies while holding long positions, nor spoke positively while shorting stocks.
"Never," Left said when asked by defense lawyer Adam Fee if he was ever long a company while simultaneously speaking negatively about it publicly. He gave the same response regarding shorting companies while speaking positively.
The trial centers on whether Left’s statements crossed from opinion into market manipulation. Prosecutors claim his private communications show he told the public one thing about his trading intentions while doing the opposite.
The government alleges Left misled investors in October 2018 by promoting a long position in Tesla Inc. and then quickly selling shares when his commentary drove prices higher. Left told jurors that reducing a long position differs from shorting a stock.
Prosecutors have presented emails they say show Left coordinated with hedge funds on stocks he planned to short. The jury also heard testimony from Mike Gorenstein, CEO of Cronos Group Inc., who said shares plunged after Left issued a report calling the cannabis distributor overvalued.
When asked if Gorenstein’s testimony made him doubt his report’s accuracy, Left said: "Everything he said in this trial validated everything I wrote in that report."
Left, 55, has denied misleading investors and maintains his trades did not require public disclosure. Jurors could begin deliberations later this week following cross-examination by prosecutors.
