Bed Bath & Beyond CFO who leapt to his death accused of 'pump and dump' to inflate company's stock value
Sunday - 04/09/2022 18:13Author: Editors DeskSource: Fox News:
Bed Bath & Beyond chief financial officer Gustavo Arnal and Gamestop Chairman Ryan Cohen were named in a class action lawsuit alleging a pump and dump scheme
his story discusses suicide. If you or someone you know is having thoughts of suicide, please contact the Suicide & Crisis Lifeline at 988 or 1-800-273-TALK (8255).
The executive vice president and chief financial officer of Bed Bath & Beyond who plunged to his death from the 18th floor of a New York City skyscraper on Friday was the subject of a class action lawsuit alleging that he and majority shareholder, Gamestop Chairman Ryan Cohen, had artificially inflated the company’s value in a "pump and dump" scheme.
Gustavo Arnal, 52, and Cohen, are listed as defendants in the class action lawsuit filed last month in the United States District Court for the District of Columbia.
According to the lawsuit, Cohen approached Gustavo about his plan to accumulate shares of BBBY and assume command of the company’s publicly-available shares.
"With control over a significant portion of the public float, Cohen would essentially act as a price support for the stock while Gustavo would act in a similar capacity by controlling the sale of shares by Insiders," the lawsuit says. "Under this arrangement, defendants would profit handsomely from the rise in price and could coordinate their selling of shares to optimize their returns."
Cohen purchased a large stake in BBBY including call options on more than 1.6 million BBBY shares with a strike price between $60 and $80 in what, according to the lawsuit, was a "classic attempt to spark a gamma squeeze, in exchange for Gustavo’s assurance that Insiders would not flood with the market with the stock."
BBBY stock climbed from $4.38 per share on July 1, 2022, to $30 per share on August 17, 2022. Between March and August, Cohen, Gustavo, and JP Morgan Securities LLC – another defendant in the lawsuit – discussed their plan of hyping the stock and exiting their positions of BBBY shares at some point, according to the lawsuit.
Arnal sold 42,513 shares of Bed Bath & Beyond stock on Aug. 16 for more than $1,029,000, according to MarketBeat.com. Following the transaction, Arnal still owned 267,896 shares in the company, valued at more than $6,488,000. By the close of the market on Friday, BBBY was trading at just about $8.63.