A federal judge in the United States has rejected a motion by prominent short-seller Andrew Left to throw out the criminal case against him. Left had argued that the prosecution was selective and targeted his online speech, but the judge denied the request without detailed explanation.
The Judge's Order and Upcoming Trial
On Monday, US District Judge Terry J. Hatter in Los Angeles issued a two-page order rejecting Left's motion. This was not the first attempt by the short-seller to have the charges dismissed; a previous bid on different grounds was also denied by the same judge in July 2024. The case is now firmly on track for a trial, which is scheduled to begin on March 17.
Andrew Left, whose stock recommendations were followed by thousands of investors, was formally charged in July 2024. The charges followed an extensive investigation into the short selling industry. Prosecutors allege that Left and his firm, Citron Research, used false and misleading posts on social media about his trading plans. These posts, concerning more than a dozen companies, were allegedly designed to move stock prices up or down just enough for him to secure quick profits.
Allegations of Market Manipulation
The prosecution's case centres on the claim that Left exploited his influence with retail investors to "game the system." He is accused of targeting both large, multibillion-dollar corporations like American Airlines Group Inc. and Tesla Inc., as well as smaller companies such as Namaste Technologies Inc. Through his posts, he allegedly nudged their stock prices to benefit his short positions.
In his July court filing, Left contended that the prosecution was improper. He claimed he was being singled out for "publishing negative opinions that move the market downward," while other Wall Street analysts who published bullish opinions that drove prices up were not pursued. His attorney, Eric Rosen, did not immediately comment on the latest ruling.
Industry Impact and Potential Penalties
This high-profile case has already sent ripples through the short-selling community. In response, a number of short sellers have proactively strengthened the disclaimers on their reports and social media posts regarding their own trading activity. Andrew Left has pleaded not guilty to all charges. The stakes are incredibly high; if convicted, he faces a maximum prison sentence of up to 25 years.
In a related development, a separate judge denied Left's request to dismiss a parallel civil lawsuit filed by the US Securities and Exchange Commission (SEC) back in April. This means the short-seller is fighting legal battles on both the criminal and civil fronts.
