To avoid trial, a short seller puts his hopes on Trump

The short seller, known for his feisty Citron Research reports and trades including shorting GameStop during the January 2021 meme-stock trading frenzy, is accused by prosecutors of exploiting his fame to manipulate stocks for quick profits. He is looking for a way to sway the administration to drop the criminal case prosecutors filed against him last year. If he is convicted on the 18 counts of securities fraud he faces, a court could sentence him to years behind bars. He has pleaded not guilty.

Left’s hopes have been stoked by President Trump’s role as an absolver of last resort for defendants and convicts complaining they were unfairly prosecuted, issuing a number of white-collar pardons and commutations.

Trump’s Justice Department has dropped marquee cases against New York City Mayor Eric Adams, a former Nebraska congressman accused of lying to the FBI, and a California restaurant-chain executive, Andrew Wiederhorn, charged with fraud and tax evasion. The president pardoned Nikola founder Trevor Milton, who was convicted of fraud in federal court for what prosecutors said were his lies to investors about his zero-emissions trucks. The Securities and Exchange Commission dropped its own civil fraud case against Milton last week. Adams, Wiederhorn and Milton have all maintained their innocence.

How to obtain this kind of mercy is something of a mystery, even to wealthy people like Left, who is based in Boca Raton, Fla. He and his lawyers say they will press the Justice Department in a meeting scheduled for this month to drop the case.

The Justice Department declined to comment.

Left had his picture taken with Trump in March at a member-guest golf tournament at Trump International Golf Club that Trump hosted (and won). He’s toured a condominium in Trump Tower in Manhattan, near where his son lives. Left, who says he avoided politics for years while living in California, has praised Trump’s economic policies in recent appearances on Fox Business.

“Everybody wants a meeting. Even the guilty guys want a meeting," Left said in a recent interview at the Waldorf Astoria in Manhattan, where he was staying while apartment hunting. “‘Everybody thinks, ‘oh, Donald Trump doesn’t mind if I cheated on my taxes.’"

Left, 55 years old, grew up in south Florida, where his stepfather worked at a deli and his mother was an elementary-school secretary. His first job after graduating from Northeastern University and returning home to Florida was reading from a script to pitch silver and other investments for Universal Commodity Corp. In the mid-1990s, regulators sanctioned the company for fraud.

Left re-established himself in southern California in the late 1990s. Left liked that he could golf in the afternoons after the market closed. In the daytime, he flipped the newly issued stock of shaky companies promoted by small Wall Street brokerages. A friend urged him to start shorting, or betting against, the shares, since they were bound to fall in price.

Left’s bearish bets against China Evergrande in 2012 and Valeant Pharmaceuticals in 2015 made him a star of short sellers. Evergrande eventually defaulted on its debt and the company collapsed two years ago. Valeant paid a $45 million regulatory fine without admitting or denying fault, after Left drew attention to its use of an undisclosed mail-order pharmacy that helped boost its sales.

“There was a time when there was no one else in the market who could move a stock like he did," said Nate Koppikar, a portfolio manager at hedge fund Orso Partners whose strategy focuses on shorting stocks.

Left’s troubles began in 2018, when the Justice Department and SEC launched a sweeping investigation of activist short sellers. Federal Bureau of Investigation agents searched Left’s Beverly Hills, Calif., house in early 2021, just after he had lost $20 million betting against videogame retailer GameStop. Left and others who wagered against GameStop were caught in a short squeeze driven by small traders who rallied online and bought up shares to push the stock higher in what became the poster child of the meme-stock craze.

Small traders vilified Left and other shorts. Some texted threats to his daughter on Instagram and ordered dozens of pizzas delivered to his house after midnight, he says. The ordeal was such a looking-glass experience—Left says he realized he was now seen as the “establishment," not the contrarian outsider—that he announced in January 2021 that he was done with short activism.

After several years of investigation, prosecutors sent Left a second subpoena in June 2022 that asked for information on 95 different trades. Many were widely held stocks, such as Meta and Nvidia, that are generally considered too big and liquid to manipulate and which Left didn’t short. Instead, he had said they were worth buying.

After learning he had been indicted, Left told his wife there was good news and bad news, he said. The bad: prosecutors charged him with fraud. “What’s the good news?" his wife asked.

It wasn’t a short-and-distort case that accused him of lying about companies, he said. “I am being indicted for telling people to buy Nvidia, Facebook, Tesla, General Electric and to short American Airlines," he said. “These are the stocks they chose."

But prosecutors say his playbook was making bold, insincere statements about stocks and hoping his words would move prices in a direction that rewarded his short-term bets. They charged him with securities fraud and lying to federal investigators about coordinating with hedge funds on trades.

Some lawyers say the fraud charges against Left are unusual because they don’t allege he put out false information. Instead, prosecutors allege his tactic of commenting on stocks and then quickly trading was an illegal scheme. He didn’t give the whole story about his trading plans, making his commentary misleading, according to prosecutors.

“That is a murky area of law," said Adam Pritchard, a law professor at the University of Michigan who worked at the SEC earlier in his career. “It matters that he is saying these things on social media, and any sensible person discounts significantly anything they see on social media."

A federal judge declined Left’s request this summer for early dismissal of the case. Left has hired a new defense lawyer, Eric Rosen, who won a surprise dismissal last year in a case that targeted traders who promoted stocks on the Discord social-media platform and sold into the froth they created.

In early September, Left announced he had invested in Loan Depot, a lender and mortgage servicer, saying Trump’s push to lower interest rates would help to more than double its stock price.

“Trump will win the ‘war on housing’," Left wrote on X. “LoanDepot is the top lender set to benefit—and the market is asleep."

The shares have risen 60% since. Left has also made appearances on Fox Business, where he praised Trump’s approach to tariffs. “Trump knew what he was doing and people around Trump knew what they were doing and they would properly adjust," he said. To take advantage, Left shorted an index of stock-market volatility, he said.

The only time Left puts down his phone and doesn’t look at his brokerage account is when he plays golf.

In March, a close friend invited him to play in a member-guest tournament at Trump International Golf Club in West Palm Beach, Left says. Trump’s team included Finland President Alexander Stubb and former pro Gary Player. They won.

Left says he was struck by how Trump mingled with people and got up to fetch his own hamburger from a buffet. Trump took a photo afterward with Left and his teammates, who finished second. Left flashed a thumbs-up sign like Trump.

Trump later shook Left’s hand and gave him a gift certificate to the pro shop for winning a contest where players compete to hit a ball closest to a pin on a par-three hole. There was no time to talk business, he said.

“What am I supposed to do, say ‘hey Mr. President, can I talk to you about my case?’" he said.

Left says he may hire a lobbyist to further his appeal within the administration. The odds of prosecutors dismissing their case now are long. Under Trump, the Justice Department unit that charged Left hasn’t dropped a case.

“It’s kind of crazy that Andrew is getting criminally charged for doing something that everybody does," said Edwin Dorsey, who writes a newsletter, The Bear Cave, focused on the world of short sellers.

Write to Dave Michaels at dave.michaels@wsj.com