Activist short-seller Andrew Left was convicted in Los Angeles yesterday on 12 counts of securities fraud, in a case initiated under President Biden and eagerly picked up by Trump’s Justice Department.
Caustic, media-friendly, and beloved by retail traders, Left was convicted for airing his criticisms of publicly traded companies and then closing out his positions after the shares fell, which prosecutors said amounted to market manipulation. “Left used his TV appearances to disguise his intentions, manipulate the stock market, and pad his pockets,” the first assistant US attorney for Los Angeles crowed.
Left said in a brief interview that he’ll appeal the ruling. “I don’t think people understand how important this is to free speech,” he said.
“Let’s put it this way: I was criminally charged with manipulating Tesla,” Left said in the interview. “Elon Musk was civilly charged [for his 420 tweet.] Who has a better opportunity to manipulate Tesla: me, or Musk?”
The jury verdict, which comes five years after federal agents seized computers and phones from Left’s California home, are likely to chill short selling. Corporate bosses and some regulators have long despised the practice of rooting for share prices to fall, but defenders say short selling creates an incentive to expose wrongdoing and acts as a check on increasingly passive stock markets.