Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, announced that Jonathan Moynahan Larmore has been sentenced to five years in prison. Larmore was found guilty of manipulating WeWork, Inc.'s stock price through a fraudulent tender offer scheme. The sentence was handed down by U.S. District Judge Paul A. Engelmayer following a one-week trial where Larmore was convicted of tender offer fraud and securities fraud.
Acting U.S. Attorney Matthew Podolsky stated: “Jonathan Larmore treated the stock market like a game he could rig to obtain instant riches at the expense of innocent investors. As today’s sentence shows, this Office will continue to advocate for significant penalties against those who manipulate our markets and defraud investors.”
During the trial, evidence revealed that Larmore, former CEO of Arciterra Companies LLC, devised a plan in 2023 to inflate WeWork's stock price using a fake tender offer. He created Cole Capital Funds LLC as part of this scheme and invested over $775,000 in WeWork call options and shares. On November 3, 2023, he released false information claiming Cole Capital intended to buy 51% of WeWork's shares at a substantial premium.
The press release led to an immediate surge in WeWork's share price during after-hours trading. However, most of Larmore's options expired before he could benefit from the spike. By November 6, 2023, WeWork filed for Chapter 11 bankruptcy protection.
In addition to his prison term, Larmore will serve three years of supervised release with an obligation to complete 500 hours of community service.
Mr. Podolsky commended the Federal Bureau of Investigation for their work on this case and acknowledged the assistance provided by the U.S. Securities and Exchange Commission.
The prosecution is being managed by Assistant U.S. Attorneys Adam S. Hobson, Sarah Mortazavi, and Justin V. Rodriguez from the Office’s Securities and Commodities Fraud Task Force.
