Witness gets caught up in insider trading probe as Andrew Left wants fraud conviction tossed

Conviction and appeal effort

A federal jury in Los Angeles convicted short-seller Andrew Left in June on 13 securities fraud counts. Prosecutors said he used social media and research reports to influence stock prices while trading those shares for himself at other prices.

His lawyers are seeking to have the verdict overturned. In a court filing, they argued that a new trial would probably end in an acquittal.

Witness under investigation

Daniel Bachus, chief financial officer of publicly traded Grand Canyon Education, testified for prosecutors. Left’s lawyers say Bachus was the sole witness who claimed Left used Citron Research reports to lie about a company, rather than simply leave information out.

Bachus has become involved in an insider trading probe, but no government agency has publicly accused him or Grand Canyon Education of misconduct related to it. The company said in an SEC disclosure that it was not the investigation’s focus.

Details remain unclear

The prosecution told Left’s attorneys it learned of the investigation only after the trial ended. The filings do not identify the agency conducting it or say when Bachus or the company learned about it; several court records remain sealed or redacted.

Justice Department prosecutors said Left’s lawyers had overstated Bachus’s importance to a case involving more than a dozen public companies. They also accused Left of seeking to run his own investigation into Bachus to undermine him as a witness.

Cases still unresolved

Left has not been sentenced. He also faces a separate civil lawsuit brought by the Securities and Exchange Commission, which remains unresolved. Left declined to comment, while his attorney, Eric S. Rosen, said he could not discuss the matter because relevant documents remained under seal. The SEC and Grand Canyon Education declined to comment, and Bachus did not respond to requests for comment.