Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeNewsEconomyShort-seller Left didn’t make ‘sense,’ Cronos CEO testifiesThe trial, which is expected to last about three weeks, is putting a spotlight on the short selling industryAuthor of the article:Last updated 1 day ago You can save this article by registering for free here. Or sign-in if you have an account.Prosecutors played a video clip of Andrew Left speaking on CNBC after his report on the company, noting that he claimed he was was still short when he’d already covered most of his position. Photo by James Jackman/BloombergThe chief executive of a Canadian cannabis distributor told jurors at the United States criminal trial of Citron Research founder Andrew Left he was stunned when the prominent short-seller issued a report saying the company was overvalued, prompting shares to plunge.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorCronos Group Inc. CEO Mike Gorenstein was the first witness Tuesday in the U.S. government’s case against Left, who is accused of misleading investors by making quick trades after issuing his recommendations. Gorenstein said Left’s report in August 2018 alleged Cronos was misleading investors about its distribution commitments. The CEO said the company had actually disclosed supply agreements, which weren’t a guarantee of sales.“I never really understood the report,” Gorenstein testified in Los Angeles federal court. “It didn’t make much sense.” He said Left never reached out to the company to verify any of his claims.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe trial, which is expected to last about three weeks, is putting a spotlight on the short selling industry. Left is one of the most prominent players and is accused of using explosive social-media posts about dozens of companies to illegally move their stock and make a quick profit. He denies wrongdoing.During his opening statement Tuesday, prosecutor Andrew Roach told jurors that Left had become famous and influential with a “pump-and-dump, short-and-distort scheme” that earned him US$20 million over the years.Defence lawyer Adam Fee argued in his opening statement that Left had earned a reputation over 25 years as a short-seller and trader by publicly disclosing his opinions about companies — something investors had valued because they made money acting on his recommendations.Gorenstein said Left had mischaracterized statements Cronos had made to investors in 2018.Prosecutors played a video clip of Left speaking on CNBC after his report on the company, noting that he claimed he was still short and expecting the shares to keep falling at a time when he’d already covered most of his position.During questioning of Gorenstein, Eric Rosen, another defence lawyer, noted that the US$3.50 target price Left set for Cronos in 2018 was in line with the company’s current value. Cronos shares in New York plunged 28 per cent on the day of the report, but later rebounded and were up 34 per cent for the year. It reached a high of more than US$25 the next year. It’s now trading around US$2.75.On Wednesday, prosecutors continued to focus on Cronos, with a stock analyst taking the witness stand.Martin Landry, managing director at Stifel Nicolaus Canada Inc., told the court that he had a buy rating on Cronos, but that after Left’s report was released, the price dropped and his phone started to ring.“Clients were calling me asking ‘what is going on, what do you think about it?’” Landry said. “The extent of the share price drop was notable and we don’t see that often.”He said it looked like Left’s report was put together rapidly.“It’s rare to see research reports with no opinions on future sales, earnings, which is the crux of our research reports,” Landry said. “If I had known the author of the report had closed his short position it would have been very important. Knowing biases is very important.” Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.