Florida Man Arrested For $77 Million Tender Offer Fraud

Press Release Florida Man Arrested For $77 Million Tender Offer Fraud Thursday, March 14, 2024 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Jonathan Moynahan Larmore is Alleged to Have Announced a Fake Tender Offer for WeWork Stock to Fraudulently Inflate the Value of His Own WeWork Securities Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging JONATHAN MOYNAHAN LARMORE with tender offer fraud and securities fraud in connection with LARMORE’s announcement of a fake tender offer to manipulate the stock price of WeWork, Inc. (“WeWork”). LARMORE is alleged to have announced a false $77 million tender offer for WeWork stock, news of which immediately led investors to buy WeWork stock at fraudulently inflated prices during after-hours trading, in an effort to drive up the value of his WeWork call options and shares. LARMORE was arrested this morning and will be presented in federal court later today in the Middle District of Florida. The case is assigned to U.S. District Judge Paul A. Engelmayer. U.S. Attorney Damian Williams said: “Jonathan Moynahan Larmore's alleged actions strike at the heart of market integrity and investor confidence. By allegedly orchestrating a deceptive scheme involving a counterfeit tender offer, he purportedly preyed upon investors, artificially inflating the value of WeWork stock for personal enrichment. The charges leveled against Larmore highlight the profound implications of his alleged fraudulent conduct, emphasizing the imperative of accountability and transparency in our financial systems.” FBI Assistant Director in Charge James Smith said: “Jonathan Larmore allegedly drafted a fraudulent press release announcing a fictitious tender offer to inflate WeWork stock prices, after personally investing in the company through call options. Thankfully, 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. As alleged, even though his scheme did not net him his desired profits, Larmore’s conduct artificially impacted the market and caused harm to other shareholders. This indictment reaffirms the FBI’s commitment to protecting our nation’s economic integrity by holding responsible those who manipulate the system for financial gain.” As alleged in the Indictment:[1] In or about the fall of 2023, LARMORE perpetrated a scheme to use a false and fraudulent tender offer to manipulate the stock price of WeWork, a co-working space company that was, at all relevant times, headquartered in New York, New York, and publicly traded on the New York Stock Exchange. LARMORE executed his scheme in three steps. First, on or about October 6, 2023, LARMORE created Cole Capital Funds LLC (“Cole Capital”), a purported a real estate investment firm that was, in fact, merely a sham company. Second, on or about November 1, 2023, and November 2, 2023, LARMORE spent more than $775,000 buying tens of thousands of cheap, short-dated, out-of-the-money WeWork call options (the vast majority of which were set to expire on November 3, 2023 at 4:00 p.m. EDT) and hundreds of thousands of shares of WeWork common stock — the latter primarily because two of LARMORE’s brokerage firms did not authorize him to trade options, but did authorize him to buy equities. Third, on or about November 3, 2023, LARMORE 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. At the time, WeWork was on the verge of bankruptcy. In fact, neither LARMORE nor Cole Capital had the intent or ability to execute the announced tender offer. Instead, LARMORE intended for news of the tender offer to fraudulently inflate WeWork’s share price and, thereby, to increase the value of LARMORE’s newly acquired WeWork call options and shares. On or about November 3, 2023, at approximately 5:12 p.m. EDT, the press release about Cole Capital’s purported tender offer was published. Within approximately one minute of publication, in after-hours trading, WeWork’s share price quickly increased more than 70% from $.85 to $1.45, and continued to rise until 5:31 p.m. EDT, when the stock reached its high of $2.14, which was a more-than-150% increase over the stock price prior to the publication of the press release. The WeWork call options LARMORE purchased could have made LARMORE millions of dollars if the news of LARMORE’s fraudulent tender offer had caused WeWork’s share price to increase significantly prior to the expiration of LARMORE’s options. Unfortunately for LARMORE, he mistimed how long it would take to properly format his press release and have it published. As a result of these delays, LARMORE’s fraudulent press release was not published—and WeWork’s share price did not accordingly rise—until approximately 5:12 p.m. EDT on or about November 3, 2023, which was about an hour after the vast majority of LARMORE’s WeWork call options had expired worthless at 4:00 p.m. EDT that day. On the following Monday, November 6, 2023, WeWork filed for Chapter 11 bankruptcy protection. On or about November 10, 2023, the small number of remaining WeWork options LARMORE had purchased expired out of the money and worthless. * * * LARMORE, 51, of Punta Gorda, Florida, is charged with one count of tender offer fraud and one count of securities fraud, each of which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. Mr. Williams praised the outstanding work of the FBI. Mr. Williams also thanked the U.S. Securities and Exchange Commission, which filed a civil action against LARMORE on November 28, 2023, for its assistance and cooperation in the investigation. This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Justin V. Rodriguez and Alex Rossmiller are in charge of the prosecution. The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation. Contact Nicholas Biase, Lauren Scarff (212) 637-2600 Updated March 14, 2024 Attachment U.S. v. Larmore Indictment.pdf [PDF, ] Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 24-093

Press Release Florida Man Arrested For $77 Million Tender Offer Fraud Thursday, March 14, 2024 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Jonathan Moynahan Larmore is Alleged to Have Announced a Fake Tender Offer for WeWork Stock to Fraudulently Inflate the Value of His Own WeWork Securities Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging JONATHAN MOYNAHAN LARMORE with tender offer fraud and securities fraud in connection with LARMORE’s announcement of a fake tender offer to manipulate the stock price of WeWork, Inc. (“WeWork”). LARMORE is alleged to have announced a false $77 million tender offer for WeWork stock, news of which immediately led investors to buy WeWork stock at fraudulently inflated prices during after-hours trading, in an effort to drive up the value of his WeWork call options and shares. LARMORE was arrested this morning and will be presented in federal court later today in the Middle District of Florida. The case is assigned to U.S. District Judge Paul A. Engelmayer. U.S. Attorney Damian Williams said: “Jonathan Moynahan Larmore's alleged actions strike at the heart of market integrity and investor confidence. By allegedly orchestrating a deceptive scheme involving a counterfeit tender offer, he purportedly preyed upon investors, artificially inflating the value of WeWork stock for personal enrichment. The charges leveled against Larmore highlight the profound implications of his alleged fraudulent conduct, emphasizing the imperative of accountability and transparency in our financial systems.” FBI Assistant Director in Charge James Smith said: “Jonathan Larmore allegedly drafted a fraudulent press release announcing a fictitious tender offer to inflate WeWork stock prices, after personally investing in the company through call options. Thankfully, 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. As alleged, even though his scheme did not net him his desired profits, Larmore’s conduct artificially impacted the market and caused harm to other shareholders. This indictment reaffirms the FBI’s commitment to protecting our nation’s economic integrity by holding responsible those who manipulate the system for financial gain.” As alleged in the Indictment:[1] In or about the fall of 2023, LARMORE perpetrated a scheme to use a false and fraudulent tender offer to manipulate the stock price of WeWork, a co-working space company that was, at all relevant times, headquartered in New York, New York, and publicly traded on the New York Stock Exchange. LARMORE executed his scheme in three steps. First, on or about October 6, 2023, LARMORE created Cole Capital Funds LLC (“Cole Capital”), a purported a real estate investment firm that was, in fact, merely a sham company. Second, on or about November 1, 2023, and November 2, 2023, LARMORE spent more than $775,000 buying tens of thousands of cheap, short-dated, out-of-the-money WeWork call options (the vast majority of which were set to expire on November 3, 2023 at 4:00 p.m. EDT) and hundreds of thousands of shares of WeWork common stock — the latter primarily because two of LARMORE’s brokerage firms did not authorize him to trade options, but did authorize him to buy equities. Third, on or about November 3, 2023, LARMORE 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. At the time, WeWork was on the verge of bankruptcy. In fact, neither LARMORE nor Cole Capital had the intent or ability to execute the announced tender offer. Instead, LARMORE intended for news of the tender offer to fraudulently inflate WeWork’s share price and, thereby, to increase the value of LARMORE’s newly acquired WeWork call options and shares. On or about November 3, 2023, at approximately 5:12 p.m. EDT, the press release about Cole Capital’s purported tender offer was published. Within approximately one minute of publication, in after-hours trading, WeWork’s share price quickly increased more than 70% from $.85 to $1.45, and continued to rise until 5:31 p.m. EDT, when the stock reached its high of $2.14, which was a more-than-150% increase over the stock price prior to the publication of the press release. The WeWork call options LARMORE purchased could have made LARMORE millions of dollars if the news of LARMORE’s fraudulent tender offer had caused WeWork’s share price to increase significantly prior to the expiration of LARMORE’s options. Unfortunately for LARMORE, he mistimed how long it would take to properly format his press release and have it published. As a result of these delays, LARMORE’s fraudulent press release was not published—and WeWork’s share price did not accordingly rise—until approximately 5:12 p.m. EDT on or about November 3, 2023, which was about an hour after the vast majority of LARMORE’s WeWork call options had expired worthless at 4:00 p.m. EDT that day. On the following Monday, November 6, 2023, WeWork filed for Chapter 11 bankruptcy protection. On or about November 10, 2023, the small number of remaining WeWork options LARMORE had purchased expired out of the money and worthless. * * * LARMORE, 51, of Punta Gorda, Florida, is charged with one count of tender offer fraud and one count of securities fraud, each of which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. Mr. Williams praised the outstanding work of the FBI. Mr. Williams also thanked the U.S. Securities and Exchange Commission, which filed a civil action against LARMORE on November 28, 2023, for its assistance and cooperation in the investigation. This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Justin V. Rodriguez and Alex Rossmiller are in charge of the prosecution. The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation. Contact Nicholas Biase, Lauren Scarff (212) 637-2600 Updated March 14, 2024 Attachment U.S. v. Larmore Indictment.pdf [PDF, ] Topic Financial Fraud Component USAO - New York, Southern Press Release Number: 24-093