Former Real Estate CEO Sentenced to Five Years for WeWork Stock Manipulation
A former real estate executive has been sentenced to five years in prison for orchestrating a fraudulent scheme to manipulate the stock price of WeWork, Inc., a co-working space company. Jonathan Moynahan Larmore, the former CEO of Arciterra Companies LLC, was convicted of tender offer fraud and securities fraud following a trial in the Southern District of New York.
U.S. District Judge Paul A. Engelmayer handed down the sentence, which also includes three years of supervised release and a requirement to complete 500 hours of community service.
According to prosecutors, Larmore created a fraudulent tender offer in November 2023, falsely claiming that a newly formed real estate investment firm, Cole Capital Funds LLC, intended to acquire a 51% stake in WeWork at a significant premium. At the time, WeWork was struggling financially and on the verge of bankruptcy.
Investigators found that Larmore had purchased a large number of WeWork call options and shares shortly before issuing the false press release. The announcement caused WeWork’s stock price to surge more than 70% in after-hours trading and eventually climb more than 150%. However, most of Larmore’s call options expired before he could capitalize on the inflated stock price.
By the following Monday, November 6, 2023, WeWork filed for Chapter 11 bankruptcy, and Larmore never followed through on the announced tender offer. Authorities determined that neither he nor Cole Capital had the financial means to execute the deal.
The Federal Bureau of Investigation led the investigation, with assistance from the U.S. Securities and Exchange Commission. The case was prosecuted by the Securities and Commodities Fraud Task Force of the U.S. Attorney’s Office for the Southern District of New York.