EXPOSED: Wall Street's $20m Manipulation Scheme, Markets Rally Off Feds Positive PCE Reading...

Talk about a great way to start the weekend huh? The market was on fire today as the Dow led all major indexes up +1.64% by sealing its fourth straight week of gains. The S&P 500 wasn’t too far behind, inching $1.1% while the Nasdaq also hit a nice one-spot closing at +1.03% on the day. 

(Source: Giphy) 

In short, this turn in price action came at the hands of a positive reading on the Fed’s PCE report today. With slight price increases in June, this was yet another confirmation that inflation has slowed, and that the Fed is still on track to cut rates within the next few months (sorry, IMF). 

(Source: Market Watch) 

Additionally, the tech sector proved to benefit the most as it skyrocketed +45.28%, with dusty old industrials taking second at +18.08% due to 3M posting a whopping 23% gain (notching its best day since 1972… when bell bottoms were still cool.). 

For more context, here’s a look at today’s heatmap before today’s major story… 

Wall Street’s $20M Manipulation Scheme Exposed! (Another Day, Another Scandal) 

Well it’s Friday folks, and yet, here we are with another scandal rocking Wall Street. Shocker…

(Source: Giphy)

This time, it’s none other than Citron Research’s finest, Andrew Left. According to reports, the guy who’s made a career out of betting against stocks and calling out shady companies, is now in the hot seat himself - because just recently, the Department of Justice has slapped him with one count of engaging in a securities fraud scheme, 17 counts of securities fraud, and one count of making false statements to federal investigators. Ouch... 

(Source: InMan) 

What’s worse, is that the SEC isn’t far behind, as they are now accusing him of a $20 million scheme to defraud his followers by publishing false and misleading statements about his stock trading recommendations. 

(Source: Bloomberg) 

For instance, Left allegedly published opinions on 23 companies, causing their stock prices to move more than 12% on average. But instead of sticking to his guns, he quickly reversed his positions to profit from those moves. ‘LOL’, if that doesn’t scream typical Wall Street I don’t know what else to tell ya. It’s like “The Sting”, only without the charm of Paul Newman and Robert Redford. 

(Source: Giphy) 

Which is why, this my friends, is a classic financial bait-and-switch as the SEC’s Kate Koladz put it bluntly: “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.”  Meaning if convicted, our boy Left could be looking at some rad jail time.

(Source: New York Times) 

How much jail time, you ask? Let’s go with up to 25 years for the securities fraud scheme count, 20 years for each of the 17 securities fraud counts, and five years for the false statements count. 

(Source: Giphy) 

So naturally, the dude must be having the worst Friday ever. But while this technically doesn’t mean anything for investors (except for the ones he screwed), this is just another reminder that when it comes to money, trust is a rare commodity. Left was a frequent commentator on networks like CNBC and Fox Business, building a reputation for his contrarian calls on stocks like GameStop and Evergrande. But now, his credibility is shot, and investors are once again left questioning who they can really trust.

(Source: Bloomberg) 

What’s more is that just because the focus is on Left, he’s only a small part of the larger picture. According to SEC filings, they’ve partnered with the DOJ to investigate relationships between hedge funds and skeptical researchers for years. Think, Steven Cohen’s infamous “Expert Networks”. 

(Source: Integrity Research) 

But most recently, they’ve been pounding the gavel into dozens of different money managers and transactions involving more than 50 stocks this year. And with the SEC’s record setting 784 total enforcement actions in 2023, they have the momentum to bring more cases like Citron’s to the surface. As they should… I mean, it’s their ONE job. 

(Source: Giphy) 

At the end of the day, this just goes to show us that for every honest trader on Wall Street, there’s someone who thinks the “Wolf of Wall Street” is an instructional video.  So as Left prepares to face the music, one thing’s clear: the drama on Wall Street never ends. Whether it’s a new financial product, a market crash, or yet another scandal, there’s always something cooking on the Street. 

(Source: Giphy) 

So next time you see some talking head on Fox Business or Mad Money (looking at you Cramer) screaming of a stock tip, just take it with a grain of salt… or better yet, just keep the whole dang salt shaker. 

(Source: Reddit) 

With that said, I hope everyone has a wonderful weekend ahead. Now, if you’ll excuse me, I’m off to invest in something truly reliable… the taco truck down the street - since, you know, the only fishy thing there is their delicious fish tacos, ha! 

Stocks.News doesn't hold any positions in companies mentioned.