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Citron Research Founder Andrew Left Lives In Fear Amidst GameStop Fallout

Left worries about potential charges as federal agencies probe activist short sellers

In 2021, shares of GameStop Corp (NYSE: GME) soared in one the most epic stock market stories that saw retail traders take on short sellers and hedge funds betting against the video game retailer.

A GameStop store operates in a strip mall on March 16, 2023, in Chicago, Illinois. The gaming retailer, which is scheduled to report earnings on March 21, saw its stock price jump more than five percent today. (SCOTT OLSON/GETTY IMAGES) 

One of the central figures in the GameStop saga was Citron Research founder, Andrew Left, who appeared live on Benzinga TV to highlight his GameStop thesis.

Left, who was once fighting against companies, now finds himself fearing federal agents.

After the GameStop saga, Left announced that Citron Research would no longer publish short reports, seeking to instead highlight stocks that could go up significantly.

Left has since reversed course and is back to highlighting troublesome companies and targeting the cryptocurrency sector.

The investor faces constant worry that he will be charged by the Justice Department and Securities and Exchange Commission over his activities as a short seller, according to a new Bloomberg interview.

“Three nights ago, I woke up and looked at my email, and it says ‘DOJ letter,’ and I’m like ‘Oh, here it is,’” Left told Bloomberg.

Instead, the email was a draft letter from a lawyer representing Left asking the Justice Department for an update.

Left said he lives in fear when people show up at his home, even delivery drivers.

“Imagine living like that. When my dogs bark at the gate for Amazon, I’m like someone’s there. It’s scarring.”

An ongoing probe by the Justice Department and SEC is looking into activist short sellers including Left and Carson Block of Muddy Waters.

Members of Congress, including House Financial Services Committee Chairwoman Maxine Waters (D-CA), spoke out against “predatory short selling” and activist short sellers hurting investors.

Members of Congress questioned whether it was market manipulation that led to drops in the stock prices of companies targeted with short reports, instead of the actual bearish theses

“I could understand if the government thought there was a short selling cabal out there. Like we all get together and go ‘Hey, let’s go destroy companies.’ This doesn’t work like that,” Left said. 

In January 2021 as he recorded a video to announce he would no longer issue short reports, feds visited his home in California to collect materials. Items like communications and calendars were also requested by the Department of Justice and SEC.

Left said he remains puzzled over what potential charges he faces.

“I have no idea what this investigation is about. Imagine explaining to your kids, to your family. I don’t think I’ve done anything wrong. It’s cost me a lot of money, a lot of stress, and I don’t know why.”

After years selling commodities, Left launched Citron Research, named after scams being lemon stocks, and started highlighted companies with problems. Left estimates he released around 200 short reports over the years.

Several of the companies Left researched have been delisted, filed for bankruptcy and in some cases have seen charges filed against executives.

Left has argued that he should be rewarded for exposing bad companies instead of being targeted by federal agencies.

“For three months, while you were at your kid’s baseball game, I was investigating a fraud. While you were watching Netflix with your wife, I was up all night working,” Left said.

The market criticisms of short sellers have included the time period in which they hold stocks, with some shorts selling the stock after the initial fall when a report is released.

“What about instead of ‘smash and grab,’ I said ‘expose and grab?’ Is that as bad?”

To investors who remember the GameStop saga, Left remains one of the people painted as a bad guy. The meme stock rally saw traders target short sellers like Left. The investor said he received threats, and traders sent messages to his family via Snapchat and social media.

While he lost money on shorting GameStop, Left also credits the stock as his best trade given the timing of his exit.

“The best trade I’ve ever made in my whole life was getting out. How crazy is that?”

Left exited his position in GameStop at around $92 per share. The investor estimates that if he stayed in the position for two more days, he would have been completely wiped out.

Produced in association with Benzinga

Edited by and

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