Bed Bath & Beyond’s Chief Financial Officer, who died Friday in New York City after falling to his death, was accused of orchestrating a scheme to increase the stock price by using a “pump-and-dump” strategy. According to a lawsuit.
Gustavo Arnal and 52, billionaire investor Ryan Cohen are named as defendants in the suit that alleges they conspired to “fraudulently inflate Bed Bath & Beyond stock’s public traded price.” according court records cited from multiple outlets.
The lawsuit alleges that Mr. Arnal and Mister Cohen made “materially falsified statements” regarding the company’s financial condition to investors and to the Securities and Exchange Commission to maintain the company’s high value prior to selling their shares.
Stock market and financial data analysis website MarketBeat reported that Mr. Arnal had sold more than 42,000 shares in Bed Bath & Beyond for about $1 million in mid-August. Mr. Cohen sold his entire 10% stake in the company around that same time.
The sell-off tanked Bed Bath & Beyond’s stock value, dropping it from a high of $30 a share down to $8. 78 a share on Aug. 23, when a group of the company’s shareholders filed a federal class action lawsuit in the United States District Court for the District of Columbia.
Ten days after the suit was filed, Mr. Arnal fell to his death from a Manhattan condominium building.
Pengcheng Si, a
Virginia resident is the main plaintiff. He filed the lawsuit on behalf of all those who purchased Bed Bath & Beyond stocks between March 25 and Aug. 18.
The lawsuit claims that around $1.2 million was lost by shareholders due to this scheme.
JPMorgan was also named in the suit for “enabling Cohen use JPMs accounts to effectuate these transactions and other launder proceeds of their criminal misconduct,” according to the filing.
Last week, Bed Bath & Beyond announced plans to close about 150 stores and cut its corporate workforce by 20%.
In June, Mark Tritton, chief executive was replaced by Sue Gove (board member).
