By Jonathan Stempel
Dec 30 (Reuters) - A federal judge rejected Andrew Left's bid to dismiss a U.S. criminal case accusing the prominent short seller of fraudulently manipulating stock prices.
In an order
made public on Tuesday, U.S. District Judge Terry Hatter rejected Left's claim that the Department of Justice specifically targeted him, known as selective prosecution, because he published bearish opinions about stocks, meaning he expected prices to fall.
The Los Angeles-based judge did not explain his reasoning in a two-page order.
In July, Hatter rejected Left's bid to dismiss the indictment on other grounds, including that prosecutors failed to allege securities fraud or fraudulent intent. A different judge rejected Left's bid to dismiss a related U.S. Securities and Exchange Commission civil case in April.
Lawyers for Left did not immediately respond to requests for comment after market hours.
Short sellers seek to profit from falling stock prices by selling borrowed stocks, and repurchasing shares later to replenish lenders.
U.S. authorities accused Left in July 2024 of using social media and cable TV appearances to promote his views about certain stocks, though his intent was to profit from quick price changes - down or up - after he spoke.
Authorities said Left and his firm Citron Research collected at least $16 million of profit by manipulating stocks such as American Airlines, Nvidia, Tesla and Twitter over 5-1/2 years, including stocks whose prices he wanted to rise.
Left pleaded not guilty in the criminal case, and could face 25 years in prison if convicted of securities fraud.
In seeking a dismissal, his lawyers said "the government may not like that activist short-sellers like Left make a living by publishing negative opinions that move the market downward. But it is a bedrock constitutional principle that the government cannot single a person out for prosecution based on the content of that person’s speech."
A criminal trial is scheduled for March 17, 2026.
(Reporting by Jonathan Stempel in New York; Editing by Stephen Coates)
