In a dramatic turn of events on Wall Street, Florida investor Barry Honig has filed a civil lawsuit against Moez Kassam, Anson Funds, and others just one week before Andrew Left’s criminal trial begins in Los Angeles, CA. The lawsuit, which was re-filed on May 6, 2026, in the U.S. District Court for the Northern District of Texas, accuses the defendants of engaging in a coordinated “short-and-distort” scheme that allegedly manipulated the stock price of biotechnology company PolarityTE, among others, causing significant losses to Honig, his family, and many investors.
Honig and his entities held nearly 10% of Polarity at one point. He claims Moez Kassam and his hedge fund, Anson Funds, in coordination with Andrew Left, disparaged the Company by making false statements, including misleading claims about its patent applications, false accusations of insider trading, and accusing the company of fraud. This drove down the stock price, allowing the shorts to profit while devastating long-term investors and contributing to the company’s eventual bankruptcy.
Background on the Alleged Scheme and PolarityTE Fallout
PolarityTE, a regenerative medicine biotech firm, became a target in what prosecutors have described as Left’s broader market manipulation activities. According to details in the DOJ’s case, Left’s Citron Research issued a report in 2018, labeling the company a “fraud” and made claims about a patent rejection that were later contested. The fallout included a securities class-action lawsuit, an SEC investigation that ultimately issued a no-action letter, and operational disruption that Honig says erased his substantial investment and harmed innovation in the sector. Honig has long maintained that he was the victim of baseless attacks by short sellers who used aggressive tactics to target companies he supported. The new lawsuit frames the actions against PolarityTE as part of a pattern involving Citron and Anson Funds.
Andrew Left’s Criminal Trial Begins This Week
As the civil suit unfolds, Left faces far more serious consequences in federal court. A final pre-trial conference occurred on May 7th, and his criminal trial in United States v. Andrew Left (Docket No. 2:24-CR-456) is set to begin on May 11, 2026, at 8:30 AM in the U.S. District Court for the Central District of California in Los Angeles before a jury. Judge Virginia Phillips is the presiding judge.
Left, the founder of Citron Research, was indicted in July 2024 on one count of engaging in a securities fraud scheme, 16 counts of securities fraud, and (initially) one count of making false statements to investigators. Prosecutors allege he ran a long-running manipulation scheme that generated at least $16 million in profits (with SEC civil claims citing around $20 million across 23 companies and 26 occasions).
Left engaged in the following activities, according to prosecutors:
• Published research reports and social media commentary designed to move stocks popular with retail investors, often while concealing coordination with hedge funds.
• Misrepresented his trading positions and independence.
• Fabricated invoices, routing payments through third parties, and lying to authorities about compensation and timing coordination with funds.
Left has pleaded not guilty and has expressed readiness to defend himself by testifying in his own trial. Although one count of making false statements was dismissed on venue grounds, if convicted on the remaining charges, Left could face decades in prison.
The timing of Honig’s lawsuit, just weeks before Left’s trial, adds a layer of irony. Left built his reputation as an activist short-seller exposing alleged corporate fraud, frequently criticizing figures like Honig in past reports pertaining to companies like RIOT Blockchain. Now, federal authorities have accused Left of employing the very manipulative tactics he once decried.
Honig, who previously settled SEC civil claims related to other matters years ago without admitting wrongdoing in a way that barred him from certain activities, has positioned the current developments as vindication. Companies he was involved with, such as early Bitcoin-related plays, have seen significant growth in some cases, contrasting with the alleged destruction wrought by Left’s short campaigns.
The Los Angeles criminal trial is expected to draw significant attention as it examines the practices of activist short-sellers, their influence on retail investors, and potential coordination with hedge funds. Meanwhile, the civil suit by Honig could proceed on its own timeline, potentially seeking damages for the alleged harm to PolarityTE and investors.
This case and the upcoming trial this week highlight ongoing tensions in U.S. markets over short-selling, free speech in financial commentary, and the line between legitimate research and market manipulation. As proceedings advance, they may offer further clarity and establish precedent and clarity regarding accountability in high-stakes trading that often times turns into alleged criminal activity.
