WASHINGTON (Reuters) - Ryan Choi, an associate of U.S. short seller Andrew Left of Citron Research, agreed to pay $1.8 million to settle U.S. Securities and Exchange Commission (SEC) charges relating to two of Citron's stock recommendations, according to court documents.
The SEC accused Choi of "negligently engaging in a scheme to defraud" readers of Citron Research in connection with two social media posts the company issued recommending readers buy stocks in two U.S.-listed companies.
A lawyer for Choi did not respond immediately to requests for comment.
In December 2020, Choi worked with Left on the research and content for the recommendations, but did not conduct adequate research or due diligence, the SEC alleged. It further said that Choi quickly traded on price increases that followed the two tweets, but failed to disclose this trading in the tweets.
Without admitting or denying the allegations, Choi agreed to pay $1.8 million in disgorgement of his profits, prejudgment interest, and fines, to the SEC to settle the charges.
The settlement is likely to be a blow to Left, who is fighting SEC and Department of Justice charges filed in July alleging he engaged in a scheme to defraud Citron Research followers by publishing false and misleading statements regarding his stock trading recommendations.