WHEN: Today, Friday, January 10, 2025
WHERE: CNBC’s “Squawk Box”
Following is the unofficial transcript of a CNBC exclusive interview with Citron Research Founder Andrew Left on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Friday, January 10. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2025/01/10/short-seller-andrew-left-addresses-government-fraud-charges-against-him.html.
All references must be sourced to CNBC.
ANDREW ROSS SORKIN: Welcome back to “Squawk Box” this morning. Activist and short seller Andrew Left was charged last summer with multiple counts of fraud. In July, authorities accused Left of manipulating the market into frauding investors by making misleading statements about his positions in well-known stocks, including NVIDIA, Tesla, and Facebook. The SEC and the Department of Justice focused on how Left publicly described his positions versus how he actually traded those stocks. And joining me right now in an exclusive interview where he’s speaking out publicly for the very first time since those allegations is Andrew Left. He’s the Founder of Citron Research. A lot of folks on Wall Street, in the investment community, hedge funds, and short sellers have been watching this case. And so I appreciate you very, very much—
ANDREW LEFT: Nice being here, Andrew.
SORKIN: Let me start with this. A lot of lawyers tell their clients when there’s a criminal trial and civil case like this not to speak out before a case begins. Why are you willing to even do that?
LEFT: It’s funny. My lawyer, obviously, I asked him, I said, should I be doing this? And he said, normally, I would say no, Andrew, but I know how you believe in your case, and we believe in it. So go ahead and do it. The reason for me, most importantly is obviously an activist, short seller, Andrew Left. I’m also a, I’m a father. I’m like a member of the community. And my name, I spent 20-some-odd years building a name on Wall Street just to have it be smirched by this. I wanted to come on and speak my peace.
SORKIN: OK. So before we speak your peace, I just want to know about the moment on a personal level, the moment that you were charged, did you know it was coming? What did it feel like? And how do you feel now?
LEFT: OK. So the moment I was charged, what’s crazier is the moment the search warrant was issued was a day after the whole GameStop Saga. So you could imagine that was a wonderful week of my life. And the four years—
SORKIN: Sarcastically, because that was not a wonderful week of your life.
LEFT: Oh no, of course. So the three and a half, four years going from there. And then you’re saying, what am I being investigated for? Like, what’s this about? So when the actual indictment came down, there was a sense of, oh my God, I’m being indicted. And then I read it and a sense of relief saying Tesla, NVIDIA, Facebook, wait, I shorted these stocks. And then, OK. If the government goes through tens of thousands of your emails and messages, you don’t know what’s going to be found. So when I read it, there was a sense of relief.
SORKIN: OK. Well, let’s talk about whether you should have that relief or not, because this is what the SEC said. We uncovered what they’re calling alleged bait and switch tactics, which netted Left and his firm, $20 million in what they’re calling ill-gotten profits. And we intend to hold Left and his firm accountable for their actions. What they’re effectively suggesting is that you put oftentimes on Twitter, what you plan to do or what you were doing. And then after you tweeted about those things, the allegation is that you either sold out of those positions or did the opposite to some degree of what you were telling the public.
LEFT: I’ve never done the opposite. So the opposite, in my opinion would be, if I told you to buy and I turned around and shorted the stock, OK. It was risk management. Anyone who trades stocks for a living know, if you have a position on, you might trim it. You might put stop-loss orders in, you might put limit orders if you’re making money. Most importantly, they use the word immediately. I traded immediately. But in some of these cases, immediately was one day. And some of these cases immediately is six days, four days. For stocks that trade 50 million shares a day. So it seems very open, this word immediate.
SORKIN: Well, in some cases, though, it does appear that it was within a day, in some cases within an hour. No?
LEFT: Of course. General Electric, years ago when Harry Markopolos was on CNBC and called GE a complete fraud. I then turned around. I wrote a quick write-up why GE is not a fraud. It’s up 300% since then. Stanley Druckenmiller came on CNBC, defended it. And sure enough, I put it out. And luckily within that day, the market also already realized it was wrong, the Markopolos report. And I sold my stock. It was maybe an hour later. It was.
SORKIN: Right. How much do you think this is about? Not just saying I’m long something, but I’m long something and I have a particular price target on a stock. So I’m thinking about in the NVIDIA example, for example, you know, which was then trading at $144. You say we see 165 before we see 120. The Department of Justice says then you sold the position at a price of 150.
LEFT: Think of how crazy that that’s a criminal charge. I said the words unrealistic price targets. By the way, since that, NVIDIA is up I think 3,500%. The stock’s 140. And I said, I think the stocks are going to trade at 160. What part of that’s unrealistic? And I sell it in the 150s. How is this a civil charge? How is that a criminal charge? And actually, the whole context of the tweet was I said, NVIDIA, this is 2019, the leader in AI. I’m discussing it before ChatGPT. So where’s the investor protection?
SORKIN: One of the examples that they use is that of Tesla. And I want to raise the issue of Tesla with you because there’s an interesting irony to all this, which was that you sued Tesla over the time when Elon Musk talked about taking the company private at $420, meaning he had put out a target on it. It ultimately obviously wasn’t something that happened. And how you think about that relative to your own situation?
LEFT: I didn’t sue him. I was part of a case that I actually dropped out of that suit in the class action because at the time I was short Tesla. I was the first Tesla critic to change tune on it, and I took a lot of heat from it. Actually, I was fortunate enough to do it at the most pivotal moment of Tesla’s history, which was Q3 ’18, two days before they reported. I put out a wonderful 21-page report explaining why I was wrong on Tesla, why Tesla is a buy.
SORKIN: Right.
LEFT: Tesla pre-released earnings, stock went higher. I made money. I sold my Tesla stock. And that’s the largest. The Tesla is the largest financial of all the charges. That’s the largest one. Me telling people to buy Tesla in 2018.
SORKIN: So, I think there’s a larger, almost philosophical and there’s a legal question and a philosophical question about what you think the investor class should or should not be able to say publicly and aloud and what they should be disclosing about when they either change their mind or change their position?
LEFT: That’s a good question. So as long as my opinion, I’ve never been accused by the SEC or DOJ of ever lying about a company. That’s the key thing. I speak the truth about companies. My opinions are truthful. As for trading, everyone has to trade with their own risk tolerance. I can’t tell you how to trade. I wish I had Warren Buffett’s patience. You know, someone else’s trading acumen.
SORKIN: Right.
LEFT: So can you imagine if this is true? Any guest on CNBC has to come on with their lawyer in the background because I’m sure people are going to be discussing NVIDIA a hundred times today on TV. And if they change their opinion in the next two days and they sell it, are they committing a criminal act?
SORKIN: Well, that’s what I was going to ask you. I was going to ask you how you think about the, you know, folks like a roaring kitty, for example. And you think about his circumstances, meaning he seemed able to move stocks materially. And at some point, I think he’s getting in or out of them when he puts up a meme and your circumstances.
LEFT: Forget about Roaring Kitty. How about the millions of people a day who are on Twitter, who are on Reddit? How about the hundreds of guests you have on CNBC and have to update their trading positions with their statements?
SORKIN: So this is a very interesting issue about sort of the First Amendment, right? On one end, which is your ability to actually go out and express an opinion and the question of the distinction between expressing an opinion and the idea of manipulation, right?
LEFT: Fair enough.
SORKIN: How do you think about that?
LEFT: Well, if your opinion is based on fact, like example, on the activist short campaigns that they discuss, all the four activist short campaigns are down 90%. Most are down 99%. Three of the four turned out to be complete frauds. OK, so I put out that information. Is that my opinion or is it the fact that moves the market? That’s the important thing. They don’t accuse me ever of lying about companies. So it’s not my opinion. If you put out fact and fact moves the market, that’s not manipulation.
SORKIN: OK. What about sharing such information or opinions that you plan to share publicly with others and other hedge funds and if you will, prior to doing it so that they can get in on the action, if you will, in advance? Right. I mean, that’s part of this as well.
LEFT: It’s not one of the — one of the — one of the charges or accounts in there or background information is that I collaborate with hedge funds.
SORKIN: Correct. And that’s where — that’s what I’m referring to.
LEFT: And I think it’s well known that many activist short sellers do collaborate with hedge funds. If you want to get good information out there, it takes a collaborator of effort. If you won an Emmy two years ago, did you not have a producer or a writer on there? You collaborated, but you won the Emmy. So I put out a report. Did I have people help me with research on it?
SORKIN: Right.
LEFT: Of course.
SORKIN: But I guess the question is, if they know that you’re planning to put out a report at 8 o’clock in the morning and that they then plan to trade on that if they could at 8:02 in the morning, is that a form of manipulation? Is that a form of insider information, even though it’s not — I mean, you don’t represent an insider. This is the very interesting sort of—
LEFT: I mean, I’m not a lawyer, so I’m not going to opine on that. That’s not one of the charges—
SORKIN: Charges per se, right.
LEFT: That’s not one of the charges. If someone does that, the market’s a caveat. I mean, look, if you did that with GameStop, you would have lost money. So, you know, the market has a mind of its own.
SORKIN: Right.
LEFT: There’s no secret button anyone has—
SORKIN: But one of the charges, though, does relate to this idea that you have a research firm on one end and a hedge fund on another and that there’s been misrepresentation of what all of that is.
LEFT: I mean, I don’t see, you know, again, that’s not one of the charges. They’re just background information to put in there to kind of soil. But I don’t even know how my reputation. I ran a hedge fund. I was the investor of my hedge fund.
SORKIN: Right.
LEFT: Everything’s disclosed. I have disclaimers, the same disclaimers that every other activist, short seller, newsletter writer, many disclaimers that are still on CNBC. What’s the there, there? Is the information I put out to the market true? Yes. Have they ever said I put out information that’s not true? No. Let the market decide on it.
SORKIN: When you think about what this case is about, do you think there’s something else going on here? I mean, do you think there’s an effort to chill the short selling universe? I know there’s a lot of short sellers out there that are that are watching this case super carefully.
LEFT: Of course, it shouldn’t just be short sellers. It should be everyone. Like I said, every single guest on CNBC has to watch this. I think what’s behind this is initially, you know, short sellers have been a thing of Hollywood folklore, you know, look at the short sellers going to do. And — and I think there was a mandate to somehow investigate short sellers. I was the one they went to. They went through everything to see was there insider trading? Was there some form of collusion? Was there, you know, naked short selling any of these things, people that I try to plant something in a company? Nothing.
SORKIN: What do you think about using, I mean, you talked about coming on our air, for example, or talking to a newspaper reporter or taking to Twitter? How is social media, do you think, changed this? And do you think there should be different rules?
LEFT: I mean, social media has really leveled the playing field of information in the stock market because now people see a short interest, people even know how to deal with short reports, what’s valid and not valid. It’s become, you know, it’s such a complex adaptive system, the stock market and social media is definitely a part of it. But so is analysis. So is television. It just all goes into the salad. And at the end, we just get price discovery.
SORKIN: Well, one of the things, though, that the SEC has talked about is creating some kind of restrictions in terms of days with which, you know, if you’re going to announce something and then be able to get out of it, how would that change the business for you?
LEFT: I mean, that’s foolish. It’s a crazy thought that you can if you publish an opinion, you can’t trade it for five days. Does that include investment banks? What if the stock goes, I mean, so in GameStop, I couldn’t cover it for five days. It just doesn’t make sense for anyone who trades stocks, understands the fact that that doesn’t make sense.
SORKIN: We do have a new president coming into office in the next couple of days. I’m curious if you think that could actually change the outcome of your case. Do you think that this administration is going to continue to pursue the case both on the criminal side of it and on the civil side of it? And do you think that the SEC is going to think about these issues differently?
LEFT: I mean, the case is out there, so it’s already been filed. You know, with a new administration comes new people at the DOJ and the SEC. I don’t look at my case as being a partisan case. But I think the new administration does put a new set of perspectives, priorities within the government.
SORKIN: Right.
LEFT: And with that, I just want fresh eyes that look at it fair and objectively and look at this case for what it is and say, oh, there’s no there, there. That’s what I’m looking forward to.
SORKIN: But I imagine your hope, just even by talking about this here, is that you’re hoping that there are fresh eyes that look at this case and look at it differently, no?
LEFT: I mean, of course. I just, like I said, I’m not looking for this being a partisan issue like, oh, now this new administration favors this type of behavior. This type of behavior is fine in any administration. I’m putting honest information in the marketplace.
SORKIN: Before I let you go, just on a very personal level, how scared are you? And I ask that — no, no, I ask that because you have a great confidence to you and we’ve talked for many years. And you’ve been on the air talking about all sorts of things over the years. But, you know, if you were to lose this case, this could include prison.
LEFT: Of course. You’re right. I trust the system. I really do. And it’s unfortunate what I’m dealing with. And I trust my legal team. I trust the judges. I trust the system that in the long run, I’m very fortunate that I have the resources to deal with this. But I think in the long run, I trust our system. And I think it’s going to work.
SORKIN: Andrew Left, thank you for coming on this morning. Appreciate it very, very much.
LEFT: Thank you.
SORKIN: OK, we look forward to following the progress of the case.
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