Firefighter testifies he lost most of $110K in retirement savings after investing in companies criticized by Andrew Left

• Prominent short seller Andrew Left is on trial in Los Angeles for securities fraud.

• A retired firefighter testified that he lost most of his 401(k) money after investing in Left Targeted stock.

• The leftist was accused of market manipulation, but his defense said he shared his honest views.

Federal prosecutors have called a witness in Andrew Left’s securities fraud trial who may resonate with jurors, a retail investor who said he lost his retirement savings by investing in stocks that plummeted over criticism from the prominent short seller.

Billy Banks, a retired firefighter from Texas, testified Thursday at Left’s trial in federal court in Los Angeles. Prosecutors allege that Left, the founder of Citron Research and a familiar face on financial television news shows, used his popularity to manipulate the market and defraud everyday stock buyers, making more than $20 million in the process.

Banks said he was working as a firefighter in 2018 when he decided to become more aggressive in investing. He testified that he used about $110,000 that he had previously invested in mutual funds in his 401(k) to buy stock in a cannabis company called CV Sciences, which trades under the ticker symbol CVSI. Banks said he purchased CVSI because he believed the company had excellent CBD products that were “really helpful” for stress and pain management.

Banks said he was on vacation with his wife when he discovered his investment had grown to $190,000. He said he remembers thinking “Oh my God” and being “so excited.”

“It’s like I’ve been watering this plant for weeks and here it is,” he said.

Shortly after returning from leave, Banks said Left made negative comments about the company, and the stock price plummeted. While he still believes in the product, he said he can’t justify the “hit” he’s taking as a result of the stock price’s collapse.

“It’s like trying to catch a tiger by the tail. You can’t catch that thing,” he said.

Banks sold his CVSI stock, losing approximately $80,000 of his initial investment. He took about $30,000 of his remaining money and invested it in another marijuana stock, hoping to recoup some of his losses. This time, he invested in a company called Namaste.

Banks testified that he saw Left in a television appearance in which the short seller said he believed Namaste’s stock price would fall to zero and that his reaction was “nothing short of horror.”

“When he said he was going to short it to zero, I saw my capital go to zero,” he said.

Banks testified that he had lost about 80% of his Namaste investment by the time he sold, calling it “devastating.”

The defense said Left never recommended that anyone buy CVSI or Namaste. They also believe that Left was proven right about Namaste and that if Banks had sold all of his shares the day Left issued the negative report, he would have lost less money than if he had sold the shares later.

Another retail investor — the kind prosecutors accuse the left of targeting — also testified Thursday. Adam Gray was working as a car salesman in South Dakota in 2018 when he said he started trading and learning about stocks.

Gray said Left was one of the people whose opinions he would pay attention to, but he began to think Left’s actions may have been fraudulent. Gray, who said he is watching marijuana stocks closely, said Left made a long bet on a cannabis company while sharing negative information about two of its competitors.

“To me, it just seemed wrong, like this shouldn’t be happening,” he said.

Gray eventually sent a tip about Left to the SEC. It’s unclear whether the revelation triggered an investigation into Left.

Left’s defense has argued that his reporting on the marijuana companies he criticized was accurate.

The trial is scheduled to continue on Friday.

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