Former real estate mogul Jonathan Moynahan Larmore has been hit with a five-year prison sentence for his role in hatching a fraudulent scheme to inflate the stock value of the struggling co-working giant WeWork. The verdict was handed down by U.S. District Judge Paul A. Engelmayer, following Larmore's conviction for one count each of tender offer fraud and securities fraud, after a one-week trial, as reported by the U.S. Department of Justice.
Acting U.S. Attorney for the Southern District of New York, Matthew Podolsky, detailed how Larmore's actions were designed to play the market to his own end, stating, “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.” Larmore, once at the helm of Arciterra Companies LLC, established a fake investment entity named Cole Capital Funds LLC and using it, he put over $775,000 on WeWork call options and shares, buying into the company when it was teetering on the brink of insolvency during the fall of 2023, he released a deceptive press statement on November 3 purporting a 51% purchase of WeWork at a staggering premium, which was a lie, a ruse to pump the stock's value, according to the same press release.
The U.S. Department of Justice's release details that Larmore's duplicity included a fraudulent press release announcing an all-cash tender offer for WeWork at more than a 700% premium—an offer Larmore had no intention or means to follow through on. The bogus news propelled WeWork's share price up over 70% in after-hours trading, spiking to over 150% the following day, had the scheme gone to plan the call options could have netted Larmore millions before they expired and WeWork filed for Chapter 11 bankruptcy protection on November 6, 2023.
Alongside his prison term, the 51-year-old Syracuse, Indiana native is subject to three years of supervised release, during which he must complete 500 hours of community service, the U.S. Department of Justice confirmed, the FBI's diligent efforts brought the case to a close, with thanks extended to the U.S. Securities and Exchange Commission for their cooperation, the SEC brought separate civil charges against Larmore amplifying the legal consequences of his financial subterfuge. The case fell under the purview of the Office’s Securities and Commodities Fraud Task Force with Assistant U.S. Attorneys Adam S. Hobson, Sarah Mortazavi, and Justin V. Rodriguez leading the prosecution.
