Tesla

Former Tesla short seller Citron Research one of 30 firms caught in DOJ probe


Former Tesla short-seller and general short-selling firm Citron Research, which is run by Andrew Left, is one of thirty firms under a Department of Justice Probe that accuses the involved parties of “potential trading abuses.”

First reported by Bloomberg Law, Citron is just one of many firms that are involved in the probe. In early 2021, the FBI seized computers from Left’s home, several people close to knowledge with the matter said. Recently, the DOJ subpoenaed market participants to provide documents that could have information regarding communications, calendars, and other records that could relate to abuses in investments and trading.

“It’s very tough to defend yourself when you haven’t been accused of anything,” Left said regarding the investigation. “I’m cooperating, and I have full faith in the system and the First Amendment.” It does not appear that Left has been formally charged with anything.

Left was a vocal short-seller of Tesla stock in the past. After closing his short position in 2018, Left then reopened it once again in 2020, stating, “Whoever bought it at these prices has to flush it out, and when it flushes, it’s going to flush hard.” Citron and Left confirmed that they would short Tesla stock to MarketWatch.

Tesla stock was trading at $857.01 when Left made these comments, up 112% in just 36 days. That was prior to the company’s 5:1 stock split, which occurred in August 2020. At the time of writing, Tesla shares were trading at $914.63, or $4,573.15 pre-split adjusted price. Tesla was one of the most shorted stocks on the market for several years, with many skeptics abandoning their positions in 2021.

Tesla (TSLA) declares five-for-one stock split

Tesla CEO Elon Musk has held strong points of view against short-selling. Musk had said previously that the idea of short-selling goes against the main idea of investing. In the past several years, the DOJ and financial regulators, such as the SEC, have faced more pushback to investigate short-selling firms and their partners.

Some of the other firms involved include Atom Investors, Bonitas Research, Connective Capital Management, Falcon Research, GeoInvesting, Gotham City Research, GrizzlyRock Capital, J Capital Research, Oasis Management, Park West Asset Management, QKM, Sabrepoint Capital Management, Silverado Capital, Spruce Point Capital Management, Valiant Capital Management, and White Diamond Research.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at [email protected]. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at [email protected].

Disclosure: Joey Klender is a TSLA Shareholder.

Former Tesla short seller Citron Research one of 30 firms caught in DOJ probe





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