Andrew Left , the prominent short seller indicted by the United States over trading tied to social media posts, is suing a

Toronto-based hedge fund , alleging its executives lied to federal investigators about payments made to him in order to “save their own skins.”

Left accused Anson Advisors Inc., Anson Funds Management and two of its leaders in a federal lawsuit Thursday of defamation and business disparagement. Left alleges that they falsely told the

Securities and Exchange Commission that he came up with an idea to funnel the proceeds of a short-selling strategy through a third party. The payments are evidence of wrongdoing in the government’s cases against him.

The Los Angeles lawsuit is the latest turn in a years-long crackdown by the U.S. on bearish researchers, hedge funds and short sellers, which Left said in the heavily-redacted complaint started as early as 2018. The probe, which looked at trading in advance of online short seller reports, became public in 2021 after Bloomberg reported that Left and others were under investigation.

The Justice Department also subpoenaed other financial firms seeking communications, calendars and other records relating to almost 30 investment and research firms, as well as three dozen individuals associated with them, people familiar with the investigation told Bloomberg.

Among those that received subpoenas was Anson, which eventually resolved two SEC probes without admission of wrongdoing, including one involving payments to Left. In his complaint, Left alleges Anson received a soft penalty from the securities regulator because the fund’s leaders — Moez Kassam and Sunny Puri — bolstered the cases against him.

“Defendants knew, or consciously disregarded a substantial risk, that their lie would result in civil and criminal charges against plaintiffs but told these lies anyway to save their own skins,” Left says in the complaint. “It worked.”

An outside spokesman for Anson said Kassam and Puri testified truthfully under oath and that Anson intends to file a motion to dismiss, “laying out in detail the legal defects and absurdity of Mr. Left’s complaint.”

“Mr. Left’s meritless complaint is nothing more than a desperate and extreme attempt to manipulate the legal system ahead of his criminal trial that starts in just a few months,” the spokesman said in an emailed statement. “Faced with 19 federal criminal counts and a dwindling list of options ahead of his day in court, Mr. Left is willing to say anything to try to escape accountability.”

The SEC didn’t comment, citing the government shutdown. The Justice Department declined to comment.

“We believe as alleged that there was a real miscarriage of justice here and we’re doing everything in our power to correct it,” Eric Rosen of Dynamis LLP, who represents Left, said in an interview.

The lawsuit seeks to cast doubt on the government’s evidence.

Left, who publishes stock tips through his Citron Research that are closely watched by thousands of investors, was charged by federal prosecutors with securities fraud in July 2024. The indictment, and a parallel civil case brought by the SEC, accuses Left of using false and misleading posts about his trading intentions in more than a dozen companies to try to nudge their stock up or down and make a quick profit. Companies named in the cases include American Airlines Group Inc. and Tesla Inc.

He was also charged by prosecutors with making false statements for allegedly lying to investigators about compensation from hedge funds. That allegation, according to Left’s lawsuit, is based on his dealings with Anson in 2018 related to a Canadian cannabis company called Namaste Technologies.

During the government’s probe, it became clear that “false invoices” for payments by Anson to Left, and who directed their creation, were critical to the government’s decision on who to charge, the complaint says. Left claims he was wrongly blamed.

Left alleges that those dealings began when Kassam, Anson’s co-founder and chairman, and Puri, the firm’s co-head of investments, reached out to him about Namaste seeking his help in an effort to have him publicly say the cannabis company was fraudulent, according to the complaint. Left, who said he had done his own research on Namaste, told Kassam that he was interested in shorting its stock, but he didn’t have a Canadian brokerage account to hold the shares. He said Kassam offered to have Anson short it for him and send him a check, according to the complaint.

US$840,000

Left and Anson then collaborated on a report, which Left published. Namaste’s stock plummeted and Anson made US$5 million on the trade. Left said he was owed US$840,000 for the shares Anson shorted on his behalf, according to the complaint.

In his lawsuit, Left alleges that Kassam or Puri suggested using a third-party. Left said he didn’t care how he was paid. He then asked the third-party in a direct message who he should invoice and was told the third-party’s company.

Left in his lawsuit alleges Anson didn’t want to pay him directly because at the time of the negative report, Anson was involved in a “bought deal offering” for Namaste and would be taking a long position on the stock. “Defendants therefore did not want to make it appear that they paid a short seller to drive the price down so that the financing would be more favourable for them, while they profited off the price dip on a short position,” Left said in the lawsuit.

Several paragraphs in the complaint that come after a description of meetings Kassam and Puri had with investigators are redacted, as are other portions throughout the 30 pages. Left’s lawyers told the court the redactions were necessary because the information involves nonpublic material from the government’s investigations.

Anson paid US$3.3 million in 2023 to resolve SEC allegations that it bought stock in public offerings for private fund clients after shorting the same stock. The following year, the firm agreed to pay US$2.25 million to resolve additional SEC allegations, including one for not disclosing to investors its payment to Left. In both matters, Anson didn’t admit or deny wrongdoing.

Left claims he learned what Puri and Kassam told investigators upon receiving documents from the government in preparation for his trial, which is scheduled for March.

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