It also alleges that the two "took advantage of the inflated stock price and used fraudulent and misleading SEC filings to sell all their BBBY shares and options at artificially inflated prices to unsuspecting and innocent public investors and then retained control of the profit."īed, Bath & Beyond told investors in an August 31 securities filing that "The company is in the early stages of evaluating the complaint, but based on current knowledge the company believes the claims are without merit."Įven before the shareholder suit, Wall Street's view of Bed, Bath & Beyond had turned sour. The complaint also claims that Cohen lied when he re-stated his ownership of the company and alleged that he had started selling his stock at that point.Īrnal also sold 55,000 shares of Bed, Bath & Beyond on August 16, although his disclosure states that the plan to sell started in April.Ĭohen and Arnal "engaged in illegal insider trading and fraudulent SEC reporting," the suit claims. The suit, which is seeking class-action status, claims that Cohen, Arnal, JPMorgan and others "engaged in a fraudulent scheme to artificially inflate the price of BBBY publicly traded stock" and "blatantly misrepresented the value and profitability of BBBY" to entice retail investors to buy shares.Īccording to the lawsuit, Cohen and Arnal cooked up a scheme whereby Cohen would hype the company's stock publicly while Arnal would limit stock sales by insiders, driving up its price. That prompted some to call for an investigation by the SEC, and on August 23 a shareholder suit was filed in Washington, D.C., district court, alleging securities fraud. ![]() But that same day, Cohen immediately started selling his stake, prompting a sell-off that drove the company's stock to one-third iits original price within a week. To kick-start the home goods company's recovery, he quickly helped usher Bed, Bath & Beyond's CEO and chief marketing officer out the door and appointed two new directors.Ĭohen filed more paperwork with the Securities and Exchange Commission on August 16, re-stating his ownership of Bed, Bath & Beyond. The stock surged again in March when Cohen, the founder of online pet products company, revealed a nearly 10% stake in the company.Ĭohen is credited with engineering a turnaround at GameStop, and his ownership was seen by come retail investors as a positive signal for Bed, Bath & Beyond. ![]() A stock surge - then a lawsuitīed, Bath & Beyond shares have been on a roller coaster, soaring during the "meme stock" frenzy of 2020 before fading last year. I am proud to have been his colleague, and he will be truly missed by all of us at Bed Bath & Beyond and everyone who had the pleasure of knowing him," Harriet Edelman, the company's chair, said in a statement. "Gustavo will be remembered by all he worked with for his leadership, talent and stewardship of our Company. ![]() On its website, the company called Arnal's death a "shocking loss." On Tuesday, Bed Bath & Beyond appointed Laura Crossen interim CFO.
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