Probably a weak case and gets quietly settled for a nominal fee. These allegations should be looked at from the long side authors with insane promotional and sensational articles, which are published 1000x more than activist short research.
How can the SEC not look at ARK for example putting out ridiculous price targets on their holdings, ie Tesla and then selling Tesla the same day promoting on social media and TV appearances.
Exactly, and if the SEC really wants to go after the behavior of trading around stock ideas shared publicly they should release clear guidance for everyone to follow.
It already has set a precedent. Andrew Left has paid, and will continue paying, dearly to defend himself. Even if it doesn't set court precedent, market participants are now on notice that they could one day could be in Andrew's shoes -- spending millions of their own money and years of their professional life fighting a bureaucratic federal administrative agency.
This raises some important questions about the Andrew Left case and the broader implications for activist short-selling. IMO this reeks of double standards, inconsistencies, and unclear regulatory boundaries. While the optics of trading around one's own reports may look bad, there's a compelling argument that this is common industry practice. If they criminalize Andrew's actions, while seemingly giving a free pass to more opaque dealings, this will have a huge negative impact on the short-selling landscape. The lack of clarity around acceptable trading timelines and disclosure requirements adds noise too. Overall, as a long-time market participant, this leaves a very sour taste in my mouth.
Love your writing btw, Edwin! Come check out my Substack if you have the chance.
A thoughtful defense. I hope Left’s lawyers are as good. I don’t know Andrew but I have always considered his research to be worth reading. That said I would never act on it until I had done my own research. The SEC apparently has a dim view of investors if it thinks we just buy or sell when someone like Left says to without doing any independent work ourselves. Another case of regulatory overreach from this SEC.
Early in the morning on Jan. 8, 2019, Left opened short positions in Roku Inc., the maker of TV streaming boxes and software, setting him up to profit if the stock were to fall, prosecutors say. At 9:41 a.m., Left posted on Citron’s Twitter account that Roku was “uninvestible,” according to the indictment. Left soon deleted the tweet and, the US says, “falsely and misleadingly” posted this instead:
“To clarify, we are watching ROKU from the side.”
Left made at least $700,000 from his Roku trades that morning, prosecutors say.
---
Beyond ‘Stupid’
Left began building a short position in Beyond Meat Inc. in mid-May 2019, according to the indictment. Then, on May 17 at 1:50 p.m., Left ripped into the maker of plant-based meat substitutes on Citron’s Twitter account, as noted in the indictment, mocking the company and predicting it would suffer from a new competitor:
“$BYND has become Beyond Stupid. Most heavily traded retail stock on Robinhood, market cap now bigger than industry, and superior competitor coming to market soon. We expect $BYND to go back to $65 on earnings On retail exhaustion. [Look]”
The short seller quickly began closing his position in Beyond Meat in Citron’s trading account, according to prosecutors. Within 12 minutes of posting the tweet, Left sold the $90 put options that expired the same day, the US says.
---
American ‘Upside Down’
Left opened short positions in American Airlines Group Inc. in his trading accounts around June 5, 2020, prosecutors say. He also purchased short-dated $19 and $20 put options that expired the same day, as the airline was trading at about $20, according to the indictment. At 11:54 a.m., Left allegedly took to Twitter to blast the airline’s balance sheet:
“$AAL Back to $10 Robinhood traders have 0 idea what they [sic] buying. Balance sheet is upside down. Unencumbered assets worth far less than current price. The reason why Buffett fully exited lower. They don’t teach finance in the Sherwood Forest.”
Left completely closed his pre-tweet trades in the airline by about 12:37 p.m., for a profit of at least $429,000, the US says.
Probably a weak case and gets quietly settled for a nominal fee. These allegations should be looked at from the long side authors with insane promotional and sensational articles, which are published 1000x more than activist short research.
How can the SEC not look at ARK for example putting out ridiculous price targets on their holdings, ie Tesla and then selling Tesla the same day promoting on social media and TV appearances.
Exactly, and if the SEC really wants to go after the behavior of trading around stock ideas shared publicly they should release clear guidance for everyone to follow.
Agreed, sounds like a load of BS and if found guilt, would be setting a dangerous precedent.
Absolutely, it would open a complete Pandora's Box for anyone that trades stocks and wants to share views publicly.
Exactly. Keep up the great work!
It already has set a precedent. Andrew Left has paid, and will continue paying, dearly to defend himself. Even if it doesn't set court precedent, market participants are now on notice that they could one day could be in Andrew's shoes -- spending millions of their own money and years of their professional life fighting a bureaucratic federal administrative agency.
Very true.
I was surprised to hear about this one too. Not sure why the SEC is going after him when there are so many worse cases of fraud and abuse.
This raises some important questions about the Andrew Left case and the broader implications for activist short-selling. IMO this reeks of double standards, inconsistencies, and unclear regulatory boundaries. While the optics of trading around one's own reports may look bad, there's a compelling argument that this is common industry practice. If they criminalize Andrew's actions, while seemingly giving a free pass to more opaque dealings, this will have a huge negative impact on the short-selling landscape. The lack of clarity around acceptable trading timelines and disclosure requirements adds noise too. Overall, as a long-time market participant, this leaves a very sour taste in my mouth.
Love your writing btw, Edwin! Come check out my Substack if you have the chance.
Impeccable writing!
Thank you!
Well done, Mr. Dorsey. Atticus Finch would be proud.
Thank you very much.
A thoughtful defense. I hope Left’s lawyers are as good. I don’t know Andrew but I have always considered his research to be worth reading. That said I would never act on it until I had done my own research. The SEC apparently has a dim view of investors if it thinks we just buy or sell when someone like Left says to without doing any independent work ourselves. Another case of regulatory overreach from this SEC.
Early in the morning on Jan. 8, 2019, Left opened short positions in Roku Inc., the maker of TV streaming boxes and software, setting him up to profit if the stock were to fall, prosecutors say. At 9:41 a.m., Left posted on Citron’s Twitter account that Roku was “uninvestible,” according to the indictment. Left soon deleted the tweet and, the US says, “falsely and misleadingly” posted this instead:
“To clarify, we are watching ROKU from the side.”
Left made at least $700,000 from his Roku trades that morning, prosecutors say.
---
Beyond ‘Stupid’
Left began building a short position in Beyond Meat Inc. in mid-May 2019, according to the indictment. Then, on May 17 at 1:50 p.m., Left ripped into the maker of plant-based meat substitutes on Citron’s Twitter account, as noted in the indictment, mocking the company and predicting it would suffer from a new competitor:
“$BYND has become Beyond Stupid. Most heavily traded retail stock on Robinhood, market cap now bigger than industry, and superior competitor coming to market soon. We expect $BYND to go back to $65 on earnings On retail exhaustion. [Look]”
The short seller quickly began closing his position in Beyond Meat in Citron’s trading account, according to prosecutors. Within 12 minutes of posting the tweet, Left sold the $90 put options that expired the same day, the US says.
---
American ‘Upside Down’
Left opened short positions in American Airlines Group Inc. in his trading accounts around June 5, 2020, prosecutors say. He also purchased short-dated $19 and $20 put options that expired the same day, as the airline was trading at about $20, according to the indictment. At 11:54 a.m., Left allegedly took to Twitter to blast the airline’s balance sheet:
“$AAL Back to $10 Robinhood traders have 0 idea what they [sic] buying. Balance sheet is upside down. Unencumbered assets worth far less than current price. The reason why Buffett fully exited lower. They don’t teach finance in the Sherwood Forest.”
Left completely closed his pre-tweet trades in the airline by about 12:37 p.m., for a profit of at least $429,000, the US says.
---
AND SO ON: https://finance.yahoo.com/news/short-seller-andrew-left-deleted-110000470.html
Either you or Erik Larson, who wrote this article, are lying here.
So?