Bed Bath & Beyond CFO who leapt to his death from New York's famed 'Jenga' building is accused of role in 'pump and dump' scheme that artificially inflated value of flailing company and cost shareholders $1.2 BILLION
The class action lawsuit was brought by Virginia resident Pengcheng Si on behalf of all those who purchased Bed Bath & Beyond stocks between March 25 and August 18.
They are now seeking damages for the alleged 'pump and dump' scheme, claiming Cohen offered to purchase a large stake in the company, including call options on more than 1.6 million hares with prices between $60 to $80.
In exchange, the suit alleges, Arnal would ensure that insiders would not flood the market with the stock.
He did so, allegedly by making 'materially misleading statements and omissions' about the company's financial standing in an effort to artificially inflate the share price,' the suit says
'Through mid August 2022, BBBY appeared — from the company's public statements and financial reporting to be a successful turning-around company,' it alleges.
But in reality, it says, Arnal 'blatantly misrepresented the value and profitability of [the company] causing BBBY to report revenues that was fictitious [and] announce publicly that the company is successfully on the way spinning off Buybuy Baby to 'unlock full value' of this 'tremendous asset.'
Buybuy Baby, though, was not actually doing well financially, the lawsuit claims.
...
...
Then on August 16, Cohen filed a document to the Securities and Exchange Commission saying he owned 9,450,100 share, including 1,670,100 shares under certain call options.
It also claimed he held onto his April call options that would only begin to pay out if the stock hit $60 a share before January 20, 2023.
He was soon granted three seats on the board of the company, the lawsuit alleges, but had actually sold most of his shares in the company at that point.
Instead, the lawsuit claims, Cohen 'submitted [the document] for the purpose of creating [a] buying frenzy of BBBY stocks so that Cohen can finish selling his shares at [an] artificially inflated price.'
Stock prices rose 75 percent that day, the lawsuit alleges. But unbeknownst to share holders, it claims, that same day, Cohen also filed a form signifying his intent to sell the remainder of his shares and call options.
It was not disclosed to the public until the market closed the following day, when shares tumbled from a record high of $30 per share to around $22.50 a share.
Then after Arnal and Cohen filed a form saying they sold all their shares on August 16, the stock down 45 percent to $16.16.
It then continued to plummet to $8.78 on August 23 — down more than 70 percent from its high of $30 a share. By September 4, Bed Bath and Beyond was trading at just $8.63.
dailymail.co.uk |
