A Florida man could face decades in prison after he allegedly concocted an illegal scheme to boost the price of WeWork stock, a newly unsealed indictment revealed.
Jonathan Moynahan Larmore allegedly announced a $77 million bid for stock in the struggling coworking company, in an effort to artificially inflate the cost of the stock options he already owned.
Prosecutors say that Lamore launched the scheme as WeWork was on the edge of bankruptcy in October 2023. By this time, the embattled company had already been the subject of the critically acclaimed television show "WeCrashed" and a Hulu documentary, both of which delved into the issues plaguing the company.
Cole Capital Funds LLC, a sham real estate investment firm, was allegedly created by Lamore, on October 6, 2023. By November 2, he had purchased tens of thousands of cheap, short-dated, out-of-the-money WeWork call options, as well as hundreds of thousands of WeWork common stock. Most of the call options were scheduled to expire on November 3, 2023 at 4:00 p.m., according to the Department of Justice.
Lamore then "caused a press release to be published announcing that Cole Capital proposed to acquire 51% of all outstanding shares owned by minority shareholders of WeWork at a more-than-700% premium in an all-cash offer worth more than $77 million," the U.S. Attorney's Office, Southern District of New York said in a press release.
Federal prosecutors allege that this announcement prompted investors to "immediately" buy WeWork stock at inflated prices in after-hours trading. WeWork stock jumped in value from $.85 to $1.45 within minutes of the announcement and eventually reached a high of $2.14.
In spite of this, Lamore did not actually earn money off the scheme because he "mistimed how long it would take to properly format his press release and have it published."
"Larmore was unable to widely distribute the press release before the end of the trading day, which failed to increase the share price in time and caused Larmore's options to expire rather than making him millions," FBI Assistant Director in Charge James Smith said.
Smith further alleged that despite Lamore's scheme failing to generate profits for him, it still impacted the market and caused harm to other shareholders.
Lamore was charged with one count of tender offer fraud and one count of securities fraud. If convicted, each charge can carry a sentence of up to 20 years.
