Citron Research has become the first short seller to face action from Hong Kong’s watchdog, which alleges the California-based group knowingly made “false and misleading” claims about Evergrande, the Chinese developer.
Hong Kong’s Securities and Futures Commission yesterday started market misconduct tribunal proceedings against Andrew Left, the head of Citron, for claims made in June 2012 that Evergrande was insolvent and had consistently presented false information.
Short sellers aim to profit from price falls by borrowing shares they do not own in the expectation they will be able to buy them back more cheaply. Mr Left made HK$1.7m ($219,251) from selling short 4.1m Evergrande shares before he made his claims, the SFC said.
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