The Securities and Exchange Commission (SEC) announces that Ryan Choi agreed to pay more than $1.8 million to settle charges that he negligently engaged in a scheme to defraud readers of Citron Research in connection with two tweets issued by the platform.

In July 2024, the SEC charged Andrew Left, who operates the Citron Research website and related social media platforms, for engaging in a scheme to defraud Citron Research followers by publishing false and misleading statements regarding his supposed stock trading recommendations.

The SEC’s complaint against Choi alleges that in December 2020, Choi worked with Left on the research and content for two buy recommendations that Left issued through Citron Research. According to the complaint, Choi failed to act reasonably by not conducting adequate research or due diligence, which he provided to Left to support the recommendations that Left included in the Citron Research tweets.

The complaint further alleges that Choi quickly traded on price increases that came after the two Citron Research tweets, and negligently failed to ensure that this trading activity was adequately disclosed in the tweets.

According to the complaint, Choi made a total of $1,647,217 in profits in connection with his trading around these two tweets.

The SEC’s complaint charges Choi with violating Section 17(a)(3) of the Securities Act of 1933. Without admitting or denying the allegations of the complaint, Choi agreed to the entry of a final judgment permanently enjoining him from violating Section 17(a)(3) of the Securities Act and requiring him to pay a civil penalty of $115,231, disgorgement of $1,647,217, and prejudgment interest of $64,818.