• Prosecutors say Andrew Left worked with hedge funds but didn't disclose it to the public.
• They said Left was paid from the profits earned by a hedge fund based on his trade recommendations.
• Left's defense said his work with hedge funds was legal and his reports reflected his own views.

The Citron Research founder is accused of manipulating the market and deceiving retail investors with a plan that earned him more than $20 million.

Prosecutors said Left was working with hedge funds and sharing in some of their trading profits. They've accused him of concealing those relationships in order to "maintain the illusion of Citron's independence."

Eliza Goldberg, a chief compliance officer at Atom, a Texas-based hedge fund, testified in a Los Angeles federal court on Tuesday that Left was paid more than $2.6 million by the fund for providing trading recommendations.

Prosecutors, who say Left hid that work from retail investors, said some of those payments were made weeks before Left published a report criticizing another activist short seller's work with a hedge fund.

In August 2019, Harry Markopolos, the famous whistleblower of the Bernie Madoff scandal, issued a short report on General Electric, accusing it of fraud "bigger than Enron."

Left issued a rebuttal tweet and report, calling Markopolos' credibility into question.

"As noted in the disclaimer on his site, Harry is being paid a % of profits from an unnamed hedge fund that is short GE," Left wrote in the report. "No...

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