Andrew Left's defense plays offense, asking why the government targeted him instead of the company he called a fraud

• Andrew Left's defense argued he exposed fraud at Namaste Technologies during his trial.
• Left's lawyer suggested the government went after him for being a "whistleblower of the fraud."
• Left is accused of market manipulation. The defense says he shared his honest opinions.

Andrew Left's defense played offense during his securities fraud trial on Friday, pressing a federal official on why the government targeted him rather than the company he accused of fraud.

Left, a prominent short-seller known for bets on stocks like GameStop and frequent TV appearances, is accused of manipulating the market and deceiving everyday investors, earning over $20 million in the process.

Among the companies Left is accused of making misleading statements about is Namaste Technologies, a Canadian cannabis company that traded over the counter in the US under the stock ticker NXTTF. Left published critical tweets and reports through his firm, Citron Research, about Namaste in the fall of 2018, accusing it of fraud.

Left's defense contends that the short-seller was right about Namaste.

On Friday, during the cross-examination of Anna Hallstrom, a US postal inspector who helped investigate Left, the defense suggested that the federal government went after the "whistleblower of the fraud" rather than the perpetrator.

Eric Rosen, Left's lawyer, outlined what he called "scammy" behavior from Namaste, including planning a "Pledge Party" that told investors if they held their shares for 90 days, they'd get to "party with Snoop Dogg in Montreal." Left had also raised concerns about Namaste's CEO, who was later fired.

Rosen said that after Left accused Namaste of fraud, "no one stepped in to stop the scam."

Namaste was also discussed in the courtroom a day earlier, when a retired firefighter named Billy Banks testified that he'd lost thousands of dollars investing in the company after Left criticized it and the stock tanked.

Rosen asked Hallstrom if she agreed that "people like Mr. Banks need to be protected" and that "regulators weren't stepping in, right?"

"I don't know why there wasn't any regulators stepping in," Hallstrom said.

Rosen also pressed Hallstrom on whether she agreed it was good for people to expose fraud: "It's good to do your own research and put it out on the internet so other people can be saved from investing money in scams, right?"

"But it's bad if he wants to trade around that true report?" he continued.

"It's bad when it's part of a broader scheme to defraud," Hallstrom said.

The exchange captured a central tension in the case: Left's lawyers are arguing that he shared his honestly held opinions and that his projections were often right. Prosecutors say the issue is that he misled the market about his trading actions, and that he said one thing while trading in the opposite direction.

The defense's argument that Left exposed fraud also echoed a common refrain from proponents of activist short sellers — that they provide a valuable service to the market by exposing wrongdoing.

"You think people would decide not to investigate and expose frauds like Namaste if they were subject to restrictions on whether they could trade in connection with their true statement?" Rosen said.

Rosen said Namaste's stock price eventually traded close to zero. Namaste later changed its name to Lifeist Wellness Inc.

The crux of the government's accusation against Left when it comes Namaste is that he coordinated with the hedge fund Anson Funds to prepare Citron Research reports and received some of their trading profits, but did not disclose it.

Left's argues there was no rule or law preventing him from working with a hedge fund.