A witness who testified in the Andrew Left case is now also embroiled in an insider trading investigation, adding a new twist to the fraud conviction of this well-known short-seller.
Left’s lawyers requested that the judge presiding over his trial overturn the jury’s verdict finding him guilty on 13 counts of securities fraud. They argued that the trial was “fundamentally unfair” because they were not given the opportunity to question the witness about the investigation or challenge his credibility.
Left's lawyer wrote: "A retrial would likely result in an acquittal."
Citron Research founder Andrew Left is, to some extent, a celebrity in the short-selling world. He bet against GameStop as it became a "meme stock," putting him at odds with certain retail traders on social media. Over the years, he has been a frequent guest on CNBC and Bloomberg Television, often sharing his views on stock prices.
Zuo has not yet been sentenced. In addition to the criminal case, he is also facing a parallel civil lawsuit filed by the U.S. Securities and Exchange Commission (SEC), which remains unresolved.
Left's criminal conviction shook some corners of Wall Street, with the trial viewed by outsiders as a test of free speech and the legitimacy of aggressive short-selling strategies. During the trial, Left testified on his own behalf, stating that his opinions about public companies were sincerely held.
One of the prosecution’s witnesses was Daniel Bachus, the Chief Financial Officer of Grand Canyon Education, a publicly traded technology company that provides services to universities. Left’s attorney stated that Bachus was the only witness to testify that Left lied to a company about a Citron Research report, rather than merely withholding information.
On August 21—several weeks after the trial concluded—Grand Canyon Education placed Bachus on paid administrative leave, citing “related to an ongoing government investigation” into stock trading by a non-employee. The company stated this in an SEC filing. Prosecutors in the Left case referred to it as an “insider trading investigation” in their own documents.
No government agency has publicly accused Bachus or Grand Canyon Education of any wrongdoing in this investigation. In SEC filings, the company stated that it is not the focus of the investigation. Representatives from both the SEC and Grand Canyon Education declined to comment. Bachus did not respond to requests for comment from Business Insider.
Left’s attorney stated that they should have been informed of this investigation during the trial in order to cross-examine Bachus and attempt to convince the jury that he was not a credible witness.
They wrote in a document: "This evidence could have undermined the credibility of the government's only witness on false statements."
In the Left case, prosecutors informed Left’s attorney that they became aware of the investigation only after the trial had concluded. It remains unclear which government agency initiated the investigation or when Bachus or Grand Canyon Education became aware of it. Many court documents related to this matter remain sealed or redacted.
The Department of Justice prosecutor stated in court filings that Left’s attorneys exaggerated Bachus’s role in this short-selling case, which accuses Left of securities fraud involving more than ten different publicly traded companies. They said Left sought to launch a “shadow investigation” into Bachus in an attempt to undermine his credibility as a witness.
The prosecution stated: "The law does not permit boundless searches conducted solely to find claims."
Left declined to comment. Left’s attorney, Eric S. Rosen, stated that he could not comment because many related documents remain under seal.
A spokesperson for the U.S. Attorney’s Office in Los Angeles declined to comment.