Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 1 of 38 Page ID #:1
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`7/25/2024
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`CDO
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`UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`January 2024 Grand Jury
`2:24-cr-00456-TJH
`UNITED STATES OF AMERICA,
`CR No.
`Plaintiff,
`I N D I C T M E N T
`v.
`[18 U.S.C. § 1348(1): Securities
`Fraud; 15 U.S.C. §§ 78j(b), 78ff
`ANDREW LEFT,
`and 17 C.F.R. § 240.10b-5: Fraud
`in Connection with Purchase and
`Defendant.
`Sale of Securities; 18 U.S.C.
`§ 1001(a)(2): Making False
`Statements; 18 U.S.C.
`§ 981(a)(1)(C) and 28 U.S.C.
`§ 2461(c): Criminal Forfeiture]
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`The Grand Jury charges:
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`7/25/2024
`
`CDO
`
`UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`January 2024 Grand Jury
`2:24-cr-00456-TJH
`UNITED STATES OF AMERICA,
`CR No.
`Plaintiff,
`I N D I C T M E N T
`v.
`[18 U.S.C. § 1348(1): Securities
`Fraud; 15 U.S.C. §§ 78j(b), 78ff
`ANDREW LEFT,
`and 17 C.F.R. § 240.10b-5: Fraud
`in Connection with Purchase and
`Defendant.
`Sale of Securities; 18 U.S.C.
`§ 1001(a)(2): Making False
`Statements; 18 U.S.C.
`§ 981(a)(1)(C) and 28 U.S.C.
`§ 2461(c): Criminal Forfeiture]
`
`The Grand Jury charges:
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 2 of 38 Page ID #:2
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`A.
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`COUNT ONE
`[18 U.S.C. § 1348(1)]
`INTRODUCTORY ALLEGATIONS
`At times relevant to this Indictment:
`The Defendant and Relevant Entities
`Defendant ANDREW LEFT, then a resident of Beverly Hills,
`1.
`California, was a securities analyst, trader, and frequent guest
`commentator on business cable news channels such as CNBC, Fox
`Business, and Bloomberg TV.
`2.
`Defendant LEFT did business as Citron Research (“Citron”),
`an online moniker he created as a vehicle for publishing investment
`recommendations. Citron’s online presence included a website,
`CitronResearch.com, and an account on the social media platform
`formerly known as Twitter with the handle @CitronResearch (the
`“Citron Twitter Account”).
`3.
`In or around October 2018, defendant LEFT formed Citron
`Capital, LP, a pooled investment vehicle (hedge fund) incorporated in
`Delaware and registered as an investment adviser in California.
`Defendant LEFT owned 85 percent of Citron Capital, LLC, which was the
`general partner of Citron Capital, LP (collectively, “Citron
`Capital”).
`4.
`Individual A was the minority partner in Citron Capital.
`Individual A was a securities analyst and trader who conducted
`research on publicly traded securities and executed trades at the
`direction of defendant LEFT.
`5.
`Using Citron’s online platform, defendant LEFT disseminated
`commentary about publicly traded companies in which he asserted that
`the market incorrectly valued a company’s stock (the “Targeted
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`Security”), advocating that the current price was too high or too
`low. Defendant LEFT’s recommendations often included an explicit or
`implicit representation about Citron’s trading position and a “target
`price,” which defendant LEFT represented as his own view of the
`Targeted Security’s true value.
`6.
`Defendant LEFT published his recommendations in Citron-
`branded reports, articles, and social media content and promoted them
`through media campaigns, including outreach to members of the news
`media, appearances on cable news programs, and interviews published
`in news articles online. In connection with his media appearances
`and interviews, defendant LEFT was routinely required to disclose the
`positions that he and Citron held in a Targeted Security.
`7.
`Defendant LEFT knew that his recommendations influenced
`investors’ decisions to buy or sell stock and thereby empowered him
`to manipulate the price of a Targeted Security. By using the Citron
`Twitter Account to generate “catalysts” -- events with the ability to
`move stock prices -- defendant LEFT profited from his advance
`knowledge that he was about to trigger such movements in the market.
`But for the scheme to work, defendant LEFT knew that investors needed
`to believe that the recommendations and positions he set forth were
`sincerely maintained, and not merely vehicles for defendant LEFT to
`personally profit. To maintain the false pretense that Citron’s
`recommendations and positions were sincerely held, defendant LEFT
`made false and misleading representations and half-truths about his
`economic incentives, conviction in Citron’s analyses, and valuations
`of Targeted Securities. Because disclosing the truth would diminish
`his credibility, defendant LEFT made false and misleading statements
`and half-truths to deceive investors to believe that he held a
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 4 of 38 Page ID #:4
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`position when, in fact, after using his influence on the market to
`manipulate stock prices in a particular direction, defendant LEFT
`closed his positions to capitalize on the temporary price movement
`caused by his public statements. Defendant LEFT used this deception
`and concealment to manipulate the market for his own financial gain.
`Stock Trading
`An investor held a “long” position in the stock of a
`8.
`publicly traded company if the investor stood to gain financially
`from an increase in the price of that company’s shares. For example,
`the investor could own the security with the expectation that the
`shares would rise in price in the future. An investor could also
`have a “long” position by buying “call” options that entitled the
`option-holder to purchase shares at a future date at a prearranged
`price (referred to as the “strike price”) that the investor believed
`would be lower than the market price the security would have reached
`by that date.
`9.
`An investor held a “short” position in the stock of a
`publicly traded company if the investor stood to gain financially
`from a decrease in the price of that company’s shares. An investor
`could achieve a short position in various ways, including “short
`selling” shares of the company’s stock or through the purchase of
`“put options.”
`Short selling involved borrowing shares of a company’s
`a.
`stock from a broker for a fee and then selling the borrowed shares.
`If the price of the shares decreased, the short seller could then
`return the borrowed shares to the broker by purchasing them at a
`lower price on the open market than the short seller originally sold
`them, thereby capturing the decline in the stock’s price as a profit.
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 5 of 38 Page ID #:5
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`When buying put options, the option-holder could force
`b.
`the counterparty to buy shares of a particular stock at a future date
`at a prearranged price. If the price of the shares decreased by that
`future date, the option-holder could sell the counterparty those
`shares at a higher price than the option-holder could acquire them
`for on the open market, thereby profiting from the fall in the
`stock’s price.
`10. “Short-dated options” expired and became worthless after a
`set duration, which could be as soon as the same day they are
`purchased. Buying short-dated options could reflect a trader’s bet
`that the price of the underlying security would move in a short
`timeframe before the contract expires.
`11. An investor could open or close trading positions by
`placing “limit” orders or “market” orders. A limit order was an
`order to buy or sell a security if its price was available above or
`below a certain price, whereas a market order was an order to buy or
`sell at whatever price the security was then trading. Placing a
`limit order could indicate the price at which a trader intended to
`buy or sell a security in the future.
`12. A “retail investor” was a non-professional, individual
`investor who purchased securities for their own personal accounts and
`generally traded and invested in dramatically smaller amounts and
`volumes as compared to institutional investors (i.e. mutual funds,
`hedge funds, or professional traders).
`13. Interactive Brokers LLC (“IB”) and E*TRADE Securities Inc.
`(“E*TRADE”) were online brokerage platforms that enabled individuals
`and institutions to trade stock shares, options, and other securities
`and financial instruments. Defendant LEFT held accounts in his name
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 6 of 38 Page ID #:6
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`and in Citron Capital’s name at IB (the “Citron IB Account”) and at
`E*TRADE (the “LEFT E*TRADE Account”) (collectively, the “LEFT Trading
`Accounts”).
`14. The New York Stock Exchange (“NYSE”) and the National
`Association of Securities Dealers Automated Quotations Stock Market
`(“NASDAQ”) were “national securities exchanges” within the meaning of
`the Securities Exchange Act of 1934.
`15. The common stock and options to trade the common stock of
`American Airlines Group Inc. (“AAL”); Beyond Meat Inc. (“BYND”);
`Cronos Group Inc. (“CRON”); Facebook Inc. (“FB”); General Electric
`Company (“GE”); Luckin Coffee Inc. (“LK”); Namaste Technologies Inc.
`(“NXTTF”); Novavax Inc. (“NVAX”); Nvidia Corp. (“NVDA”); India
`Globalization Capital Inc. (“IGC”); Invitae Corp. (“NVTA”); Palantir
`Technologies Inc. (“PLTR”); PolarityTE Inc. (“PTE”); Roku Inc.
`(“ROKU”); Tesla Inc. (“TSLA”) Twitter Inc. (“TWTR”); and XL Fleet
`Corp. (“XL”) were securities. AAL, BYND, CRON, FB, GE, LK, NVAX,
`NVDA, IGC, NVTA, PLTR, PTE, ROKU, TSLA, TWTR, and XL were issuers
`with a class of securities registered under section 12 of the
`Securities Exchange Act of 1934 (15 U.S.C. § 78l) and that were
`required to file reports under section 15(d) of the Securities
`Exchange Act of 1934 (15 U.S.C. 78o(d)).
`The Investigation into Illegal Market Manipulation
`16. The Federal Bureau of Investigation (“FBI”), the United
`States Postal Inspection Service (“USPIS”), the United States
`Attorney’s Office for the Central District of California (“USAO”),
`and the Fraud Section of the United States Department of Justice
`(“DOJ”) were conducting a federal criminal investigation of defendant
`LEFT for federal crimes, including illegal market manipulation in
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 7 of 38 Page ID #:7
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`violation of the federal securities laws (the “Federal
`Investigation”).
`17. The United States Securities and Exchange Commission
`(“SEC”) was an agency of the United States conducting a civil
`investigation of defendant LEFT for violations of the federal
`securities laws (the “SEC Investigation”).
`B.
`THE SCHEME TO DEFRAUD
`18. Beginning no later than in or about March 2018, and
`continuing through at least in or about October 2023, in Los Angeles
`County, within the Central District of California, and elsewhere,
`defendant LEFT, knowingly and with intent to defraud, devised,
`participated in, and executed a scheme to defraud investors and
`potential investors in connection with securities of issuers with a
`class of securities registered under Section 12 of the Securities
`Exchange Act of 1934 and that were required to file reports under
`section 15(d) of the Securities Exchange Act of 1934, in violation of
`Title 18, United States Code, Section 1348(1).
`C.
`THE OPERATION OF THE SCHEME
`19.
`The scheme to defraud operated, in substance, as follows:
`a.
`Knowing that Citron’s reputation with investors had
`the power to move markets, defendant LEFT selected a Targeted
`Security about which he intended to publish commentary with the
`intention of manipulating the Targeted Security’s price.
`b.
`Defendant LEFT prepared commentary about the Targeted
`Security for dissemination through Citron. In some instances, the
`commentary represented defendant LEFT’s own work. In other
`instances, defendant LEFT disseminated as his own the commentary of
`third parties, such as analysts at hedge funds.
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 8 of 38 Page ID #:8
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`In the leadup to publication of Citron’s commentary,
`c.
`defendant LEFT established long or short positions in a Targeted
`Security in one or both of his accounts, the LEFT Trading Accounts,
`such that defendant LEFT profited by taking advantage of the intended
`short-term movement in the Targeted Security’s price caused by his
`commentary.
`To exploit his advance knowledge of the timing and
`d.
`subject of the forthcoming commentary on the Targeted Security,
`defendant LEFT often built his positions using inexpensive, short-
`dated options contracts that would expire within zero to five trading
`days and submitted limit orders to close his positions as soon as the
`Targeted Security reached a certain price.
`e.
`To maximize the impact of Citron’s commentary on the
`price of the Targeted Security, and thus defendant LEFT’s ability to
`profit from his advance knowledge that a price movement was about to
`be triggered, defendant LEFT caused Citron’s commentary to be
`deceptive in numerous respects, including the following:
`i.
`Knowing that Citron’s influence on the market was
`largely based on his personal reputation, defendant LEFT concealed
`the contributions of third parties, including hedge funds, in the
`preparation of Citron’s commentary. Defendant LEFT also maintained
`the false pretense that the content of the Citron’s commentary was
`not tainted by any conflict of interest by concealing that he often
`provided these and other third parties, including in return for
`compensation, advance notice of the anticipated publication of Citron
`Reports to enable the third parties to profit by trading around the
`Citron Reports and/or mitigate their losses by adjusting their
`positions.
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 9 of 38 Page ID #:9
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`ii. Knowing that Citron’s influence on the market was
`also based in large part on the public’s perception that he was
`confident in the content and conclusions of Citron’s commentary,
`defendant LEFT concealed his intention to trade a Targeted Security
`in a manner inconsistent with the content and conclusions of Citron’s
`commentary by covering all or the majority of the positions he held
`in the Targeted Security shortly after the Citron commentary on the
`Targeted Security was published.
`iii. To maximize the impact of Citron’s commentary on
`the price of a Targeted Security, defendant LEFT bolstered Citron’s
`credibility through false and misleading statements about its
`research staff, process, independence, external investors, and
`economic incentives.
`iv. To enhance the perception that he was confident
`in the Citron commentary’s conclusions and create the perception that
`his analyses were rigorous, defendant LEFT often included a “target
`price” for a Targeted Security which was purportedly derived from his
`analyses and reflected his sincere projection of the Targeted
`Security’s future price. In reality –- with the hope of triggering
`not a pistol shot but a cannon blast -- defendant LEFT selected
`extreme target prices to attract media attention and provoke an
`immediate change to the prices of the Targeted Security while
`concealing his intention to exit all or the majority of the positions
`he held in the Targeted Security well before they reached -- if they
`ever did -- the target price selected.
`v.
`To draw the attention of news-based trading
`algorithms and to alarm investors, defendant LEFT included
`sensationalized headlines and inflammatory language in the Citron
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`reports, such as “fraud” and “smoking gun.” In employing this
`rhetoric, defendant LEFT generally sought to maximize the impact on
`the price of the Targeted Security as quickly as possible and create
`the opportunity for defendant LEFT to profitably exit his position as
`quickly as possible.
`f.
`Knowing that Citron’s influence on the market was
`largely based on the public’s perception that he was confident in the
`content and conclusions in Citron’s commentary, defendant LEFT made
`false and misleading representations about his and Citron’s trading
`and concealed the fact that he intended to and did trade in a manner
`designed to exploit the temporary price volatility that Citron’s
`commentary created. To profit from the intended price movement
`triggered by Citron’s reports and tweets, defendant LEFT covered all
`or substantially all of the positions he held in a Targeted Security,
`often within hours -- and sometimes minutes -- after publication.
`g.
`To buttress the public perception that defendant LEFT
`was committed to the views expressed in Citron’s commentary,
`regardless of the immediate impact on the price of a Targeted
`Security, defendant LEFT engaged in media campaigns, appearing in
`podcast and television interviews and in print and online media, to
`promote his investment commentary, often including false and
`misleading statements. These campaigns had the intended effect of
`amplifying defendant LEFT’s ability to manipulate the price of the
`Target Securities.
`h.
`To create the false impression that he managed outside
`investors’ money, in order to bolster his influence with the
`investing public and ability to artificially move securities prices,
`defendant LEFT made false and misleading statements –- including
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`publicly issuing “investor letters” –- to advance the false pretense
`that he successfully managed third-party investors’ funds and was a
`credible investment adviser. In fact, Citron Capital never had
`outside investors.
`i.
`Knowing that Citron’s influence on the market was
`largely based on defendant LEFT’s personal reputation and market-
`moving capacity, defendant LEFT also falsely represented that he did
`not share Citron’s commentary with hedge funds before the reports
`were published. In truth, defendant LEFT often provided third
`parties, including hedge funds, with advance notice of the
`anticipated publication of Citron’s commentary to enable the third
`parties to profit by trading around the commentary and, in other
`instances, mitigate their losses by adjusting their positions before
`publication. For example:
`i.
`Defendant LEFT coordinated with hedge funds to
`disseminate short reports and information to be posted on Twitter,
`coordinated with hedge funds regarding the timing of publication, and
`enabled the hedge funds to trade in the Targeted Securities before
`the reports were disseminated. In exchange for sharing his planned
`announcements with the hedge funds in advance of posting them
`publicly, the hedge funds paid defendant LEFT a portion of their
`trading profits.
`ii. To maintain the illusion of Citron’s
`independence, and thus the credibility of Citron’s commentary,
`defendant LEFT concealed Citron’s financial relationships with hedge
`funds, and falsely represented to law enforcement that Citron “never”
`exchanged compensation with a hedge fund or coordinated trading with
`a hedge fund in advance of the issuance of its commentary.
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`iii. To conceal his coordination with and compensation
`from one hedge fund, defendant LEFT directed a third party to create
`false invoices requesting payments for research services even though
`no research services had been provided. In truth, the payments were
`defendant LEFT’s share of profits from the hedge fund’s trading
`around Citron’s publications and media campaigns.
`20. To maintain his scheme to manipulate the market and prevent
`his deceptive practices from being discovered, defendant LEFT:
`a.
`Communicated using encrypted messaging apps;
`b.
`Deleted electronic communications even when directed
`by the SEC to maintain those communications for use in its
`investigation into defendant LEFT and Citron’s practices; and
`c.
`Made false statements when interviewed by federal law
`enforcement in connection with the Federal Investigation.
`Defendant LEFT’s Use of Deceptive Reports
`Cronos Group Inc. (CRON)
`21. On or about August 27 and August 28, 2018, in electronic
`communications, defendant LEFT wrote Individual B, a portfolio
`manager for Hedge Fund A: “I have a hot voice in cannibas[;] Let’s
`take a vantage of it”[;] and “what stock is alll retail . . . the
`best shorts are retail shorts no doubt[;] we can make money in weed
`[;] i have good weed track record . . . do we go long [other
`company] or short CRON . . . we can DESTROY CRON,” and “cron short
`we could get 2 bucks.”
`22. At the open of the market on the morning of on or about
`August 29, 2018, defendant LEFT had no position in CRON. At
`approximately 9:41 a.m., defendant LEFT began building a short
`position in CRON. Prior to 10:07 a.m. on or about August 30, 2018,
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 13 of 38 Page ID #:13
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`defendant LEFT had built a short position of approximately 883,900
`shares of short exposure to CRON (including a short equity position,
`put options purchased, and call options sold).
`23. On or about August 30, 2018, at approximately 10:07 a.m.,
`defendant LEFT posted on the Citron Twitter Account, including a link
`to a Citron short report with the headline, “CRON: The Dark Side of
`The Cannabis Space” and a tweet stating “$CRON tgt price $3.5.
`Everything that is contaminated about the Cannabis space. ALL HYPE
`with possible securities fraud . . . .” At the time of the tweet,
`CRON was trading at approximately $11.50 per share.
`24. On or about August 30, 2018, at approximately 11:08 a.m.,
`defendant LEFT posted again on the Citron Twitter Account, promoting
`his short position on CRON, that, “Andrew Left from Citron on CNBC
`Fast Money 5:25pm ET to discuss why $CRON is the most overhyped of
`all the ‘pot stocks’ with a target price of $3.5[.]”
`25. Defendant LEFT placed orders to begin closing out his short
`CRON position approximately 24 minutes after posting the first tweet.
`By the close of the trading day, defendant LEFT had a net short
`exposure of approximately 348,900 shares –- a reduction of
`approximately 61% of defendant LEFT’s total pre-CRON tweet position.
`26. Later on August 30, 2018, after the close of market,
`defendant LEFT appeared on CNBC’s “Fast Money” and defended his
`characterization of CRON as a fraud. During the telecast, defendant
`LEFT was directly asked –- twice –- about his own position in CRON.
`The host followed up and asked, “Are you just as short the stock
`right now as you were at the beginning of the day?” Defendant LEFT
`falsely stated that he only covered a “small size” of his short
`position in CRON earlier that day when, as defendant LEFT then knew,
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 14 of 38 Page ID #:14
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`at the time of his appearance on CNBC, he had already closed more
`than 60% of his pre-tweet positions.
`27. On or about August 31, 2018, in an electronic communication
`to Individual B, defendant LEFT wrote that once he realized that it
`was retail investors who owned CRON stock, his trades around Citron’s
`commentary were like taking “candy from a baby.”
`28. On or about October 4, 2023, and October 5, 2023, in an
`effort to conceal his market manipulation scheme, defendant LEFT
`falsely represented in testimony given under oath before the SEC that
`he did not target stocks that had large retail bases.
`Tesla, Inc. (TSLA)
`29. On or about October 22, 2018, in the LEFT E*TRADE Account,
`defendant LEFT purchased short-dated call options, representing more
`than approximately 235,000 shares of TSLA stock, that expired three
`days later, on October 26, 2018.
`30. Or about October 23, 2018, defendant LEFT posted the
`following on the Citron Twitter Account to promote his long position
`on TSLA: “$TSLA dropping earnings on top of $F tomorrow might be a
`bad sign for shorts. After reviewing all recent info on $TSLA
`dominating its categories, Citron is LONG Telsa for this quarter.”
`Defendant LEFT also included a link to a Citron report on TSLA. At
`the time, TSLA’s stock was trading at approximately $266.
`31. Within one minute of announcing, “Citron is LONG Tesla for
`the quarter,” defendant LEFT placed an order to sell call options
`representing approximately 120,000 shares of TSLA -- more than half
`of his pre-tweet position -- for a profit of at least $1 million. By
`the close of the next trading day, on or about October 24, 2018,
`defendant LEFT sold approximately 81 percent of his pre-tweet
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 15 of 38 Page ID #:15
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`position for a profit of at least $6.6 million. This trading all
`occurred prior to TSLA’s earnings announcement on or about October
`24, 2018.
`32. Expecting that Citron’s commentary on TSLA would invite
`others to question Citron’s integrity and to advance the false
`pretense that defendant LEFT did not opportunistically trade around
`Citron’s reports, defendant LEFT stated in the report:
`We know this note is going to have many critics, most being
`our fellow short sellers who might categorize us as
`opportunist. To anyone who challenges the integrity of
`Citron or our constant monitoring of the Tesla story all
`you have to do is look at the class action lawsuit recently
`filed against Tesla. In it you will see the principal of
`Citron was actively trading tens of millions of dollars of
`Tesla and the infamous “$420” tweet resulted in a loss of
`almost $2 million. By no means does Citron only trade on
`publishing stories. We actively manage a book that has
`been trading Tesla for five years.
`
`33. On or about October 23, 2018, defendant LEFT appeared on
`CNBC to promote Citron’s long report on TSLA.
`Nvidia Corp. (NVDA)
`34. On or about November 20, 2018, at approximately 8:40 a.m.,
`in an electronic communication with Individual C, a portfolio
`manager, defendant LEFT wrote: “Do you want to make some fast
`money[.] Put together a thesis why nvda is oversold . . . We can
`destroy it . . . Just read the analyst notes from this past quarter
`and assemble the best of the ideas.”
`35. Later that morning, between approximately 9:40 a.m. and
`10:17 a.m., defendant LEFT, through the LEFT Trading Accounts, opened
`long positions in NVDA, including short-dated call options that
`expired three days later.
`36. At approximately 10:17 a.m., defendant LEFT promoted NVDA
`as a favorable investment on the Citron Twitter Account, stating,
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 16 of 38 Page ID #:16
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`“Citron buys $NVDA. This is the first time in 2 years stock offers
`an appealing risk-reward to investors . . . We see $165 before we see
`$120.” At the time, NVDA’s stock was trading at approximately $144.
`37. Despite his representation that he expected NVDA’s share
`price to rise to $165, less than two hours after announcing “Citron
`buys $NVDA,” defendant LEFT sold 100 percent of his pre-tweet
`positions in the LEFT Trading Accounts when the NVDA was trading
`within a range of approximately $150 – $151, for a profit of at least
`$930,000.
`
`Twitter, Inc. (TWTR)
`38. On or about December 20, 2018, defendant LEFT held
`approximately 145,000 share short equity position in TWTR stock in
`the LEFT Trading Accounts. In the Citron IB Account, defendant LEFT
`bought short-dated put options, representing more than 1.2 million
`shares of TWTR stock, that expired on December 21, 2018.
`39. Prior to publishing a tweet concerning TWTR, at
`approximately 9:41 and 9:43 a.m., defendant LEFT entered limit orders
`to sell his put options in the Citron IB Account.
`40. At approximately 9:52 a.m., defendant LEFT posted on the
`Citron Twitter Account with a link to a Citron report about TWTR:
`“$TWTR has become Harvey Weinstein of social media. Price tgt $20
`Amnesty Intl study cannot be ignored by Wall St or Madison Ave.
`$TWTR will be forced to clean up the site and will have a fast impact
`on MAU[.]”. At the time of the tweet, TWTR’s stock was trading at
`approximately $31.
`41. Within one trading day, defendant LEFT closed 100 percent
`of his short positions in TWTR in the LEFT Trading Accounts when TWTR
`
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 17 of 38 Page ID #:17
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`was trading within a range of $28 – $30 for a profit of at least $2
`million.
`42. On or about December 20, 2018, in private electronic
`communications, defendant LEFT and Individual A had the following
`conversation about their trading around Citron’s tweet and report on
`TWTR:
`
`I feel like I want blood
`Defendant LEFT:
`Made some money back today on
`
`the short side
`
`
`$2m trade Twtr
`Individual A:
`
`Gives power for long
`Defendant LEFT:
`
`
`Not bad
`Individual A:
`
`
`Whew
`Defendant LEFT:
`If we bounce
`
`
`Huge fucking day
`Individual A:
`
`
`Every news outlet is calling me
`Defendant LEFT:
`
`
`Love the title. Harvey Weinstein of
`Individual A:
`social media
`Love twtr bounce
`
`
`
`We will get another shot at it
`Defendant LEFT:
`
`43. During the same conversation, defendant LEFT and Individual
`A discussed being “a tweet away” from meeting Citron’s end of year
`target of $21 million.
`
`Facebook, Inc. (FB)
`44. On or about December 26, 2018, in the morning, defendant
`LEFT opened a long position in FB in the LEFT Trading Accounts,
`including approximately 20,000 shares of stock and short-dated call
`options representing approximately 340,000 shares of FB stock that
`expired in two days on December 28, 2018.
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`Case 2:24-cr-00456-TJH Document 1 Filed 07/25/24 Page 18 of 38 Page ID #:18
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`45. On or about December 26, 2018, at approximately 9:52 a.m.,
`defendant LEFT posted on the Citron Twitter Account, with a link to a
`Citron report on FB: “$FB Backing up the sleigh. $160 tgt. Citron
`presents the only information that counts on $FB looking past the
`rhetoric. Would you rather have your kids addicted to Nicotine or
`Instagram? Wall St answer will amaze you[.]” At the time of the
`tweet, FB’s stock was trading at approximately $129.
`46. To cause a temporary and artificial increase in the stock
`price of FB by which he could profit, defendant LEFT publicly stated
`in the Citron report that FB was Citron’s “2019 S&P Stock of the
`Year.”
`47. On or about December 26, 2018, in a private electronic
`communication, defendant LEFT explained his strategy to artificially
`manipulate the price of FB stock: “As crazy as it sounds when I put
`out reports and big names like this in the middle of the day what I’m
`really doing is switching algorithms” and “sometimes it works in a
`big way.”
`48. Within six hours of posting Citron’s tweet and report
`promoting his long position in FB, defendant LEFT sold the equivalent
`of approximately 320,000 shares, approximately 89 percent of his pre-
`tweet position in the LEFT Trading Accounts, at a time when FB was
`trading within a range of approximately $130 - $134. Within 48
`hours, defendant LEFT sold 100 percent of his pre-tweet long
`positions in FB for a profit of at least $680,000.
`Defendant LEFT’s Use of Deceptive Tweets
`Roku, Inc. (ROKU)
`49. On or about January 8, 2019, between market open and
`approximately 9:40 a.m
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