Andrew Left, the renowned GameStop Corp GME short-seller, has pleaded not guilty to the fraud charges brought against him by the United States. This sets the stage for a high-profile legal confrontation over his trading strategies.
What Happened: Left, who is known for betting against stocks, appeared in a Los Angeles federal court on Monday and entered a not guilty plea, reported Bloomberg. The charges against him include market manipulation and providing false information to investigators. If convicted, Left could face a lengthy prison sentence.
During the hearing, Magistrate Judge Rozella Oliver set a $4 million bond, with $1 million of it to be collateralized. Left was given until Aug. 5 to come up with the $1 million. The prosecution argued that Left, who has assets worth over $70 million, including property abroad, was a flight risk.
Left, whose trading activity has been restricted, is also prohibited from making financial transactions exceeding $100,000 without special permission. His trial is scheduled for Sept. 24.
These charges are part of a broader U.S. investigation into the relationship between hedge funds and skeptical researchers. Left’s case is already being used by industry critics as an example of the need for increased scrutiny.
Why It Matters: Left, the founder of Citron Research, turned himself in to authorities in Los Angeles on Monday. He was indicted last week on 19 criminal counts by a grand jury.
Left is accused of using his influence to manipulate stock prices in his favor. The charges imply that Left would publicize his bets, set ambitious price targets, and then quickly close his positions once his statements had affected the market.
Left’s legal troubles come after he was charged with fraud by federal prosecutors who allege that he manipulated stock prices for his own financial benefit. The charges imply that Left would publicize his bets, set ambitious price targets, and then quickly close his positions once his statements had affected the market.
Left’s prosecution is already being used as fodder by critics of the industry. Separately, the U.S. Securities and Exchange Commission sued Left over alleged violations of the law in a civil complaint on Friday, according to the report.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
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