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Stock analyst and trader Andrew Left — whose Citron Research firm was a thorn in the side of Zillow and dozens of other companies whose business practices he questioned in influential reports — has been indicted by the Department of Justice for alleged stock market manipulation.
A frequent commentator on business programs on CNBC, Fox Business and Bloomberg Television, Left is accused of stating publicly that companies he’d researched were undervalued or overvalued — then taking positions in the companies that were the opposite of what he’d advised investors to do.
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The 19-count indictment, filed by the DOJ in a U.S. District Court in Los Angeles Thursday, claims Left used his social media following and public platform to earn at least $16 million by fraudulently manipulating the stock market from March 2018 to October 2023.
The Securities and Exchange Commission also announced charges against Left and his firm, Citron Capital LLC, on Friday, alleging in a complaint that Left engaged in a multi-year “bait-and-switch” scheme to defraud his followers of $20 million.
Citron Research did not immediately respond to Inman’s request for comment. On its website, Citron boasts that more than 50 companies it raised questions about in its coverage from 2001 through 2008 later came under scrutiny by regulators.
Citron initially made a name for itself by taking short positions in companies that it claimed had adopted unprofitable business practices or engaged in outright fraud. Short sellers profit by borrowing and selling shares in companies they think are overvalued, then buying them back at a lower cost.
In a 2013 report, Citron predicted Zillow’s stock would fall to $30 per share due to a “lack of appeal among their customer base” and the company’s allegedly “precarious position in the real estate industry.”
“The Citron report, written by a company known for being paid by short-sellers who stand to financially benefit from falls in Zillow’s stock price for such reports, is anything but accurate and thorough,” Zillow said of the report at the time.
In 2019, Citron Research flipped its position and said it was bullish on Zillow, touting the return of co-founder Rich Barton as CEO.
When news of Left’s indictment broke, Zillow co-founder and former CEO Spencer Rascoff posted, “This was a long time coming,” on the social media platform X.
In recent years, Citron expanded beyond singling out companies it thought were overvalued and good targets to short and also began touting companies it saw as promising opportunities for investors to take a long position in.
In its indictment, the DOJ characterized Citron Research as little more than “an online moniker” that Left created as a vehicle for publishing investment recommendations. In 2018, Left formed Citron Capital LP, a hedge fund incorporated in Delaware and registered as an investment adviser in California.
The SEC accuses Left of using the Citron Research website and related social media platforms on at least 26 occasions “to publicly recommend taking long or short positions in 23 companies and held out the positions as consistent with his own and Citron Capital’s positions.”
Once the recommendations were issued and the companies’ share prices moved up or down, “Left and Citron Capital quickly reversed their positions to capitalize on the stock price movements,” the SEC alleged. “As a consequence, Left bought back stock immediately after telling his readers to sell, and he sold stock immediately after telling his readers to buy.”
Left, 54, previously lived in Beverly Hills but now resides in Boca Raton, Florida, the SEC said.
“Andrew Left took advantage of his readers. He built their trust and induced them to trade on false pretenses so that he could quickly reverse direction and profit from the price moves following his reports,” Kate Zoladz, Director of the SEC’s Los Angeles Regional Office, said in a statement. “We uncovered these alleged bait-and-switch tactics, which netted Left and his firm $20 million in ill-gotten profits, and we intend to hold Left and his firm accountable for their actions.”
Andrew Left at Real Estate Connect San Francisco
When Left appeared onstage at Inman Real Estate Connect San Francisco in 2018, he was introduced as “a skeptic on equity markets and valuations.”
In a discussion with then-Warburg Realty President Clelia Peters and Mauricio Umansky, CEO of The Agency, Left was asked about the market capitalizations of publicly-traded companies seeking to carve out a bigger share of the real estate business.
“I mean, it’s amazing that Netflix is worth more than Disney, right?” Left said. “Obviously, if you look at, you know, Tesla and General Motors or Ford, it’s a phenomenon that happens across [industries] — which is that Wall Street pays a lot of money for disruption.”
“I think everyone knows that Tesla has disrupted,” Left said. “As a fact, the car industry, everyone is going to make electric cars in the next 10 years. And I think with the real estate business it’s still pretty much up in the air. Is it Redfin? Is it Compass? Is it Zillow? Who’s going to be the ultimate disrupter? So in the meantime, let’s just give them all big valuations.”
