Former Real Estate CEO Sentenced to Five Years in Prison

Jonathan Moynahan Larmore, the former CEO of Arciterra Companies LLC, was sentenced to five years in prison for manipulating the stock price of WeWork, Inc. using a fraudulent tender offer scheme.

Larmore, 51, of Syracuse, Indiana, was found guilty of one count of tender offer fraud and one count of securities fraud by U.S. District Judge Paul A. Engelmayer after a one-week trial.

According to the evidence presented in court, Larmore created a sham real estate investment firm called Cole Capital Funds LLC and spent over $775,000 buying tens of thousands of cheap, short-dated, out-of-the-money WeWork call options and hundreds of thousands of shares of WeWork common stock.

Larmore then published a fake press release announcing a proposed acquisition of 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.

However, neither Larmore nor Cole Capital had the intent or ability to execute the announced tender offer, and Larmore intended for news of the tender offer to fraudulently inflate WeWork’s share price and increase the value of his newly acquired WeWork call options and shares.

The WeWork share price quickly increased during after-hours trading by more than 70% and continued to rise to a high of more than 150% over the stock price prior to the publication of the press release. WeWork filed for Chapter 11 bankruptcy protection the following Monday, November 6, 2023.

Larmore was also sentenced to three years of supervised release during which he must perform 500 hours of community service. Acting U.S. Attorney Matthew Podolsky praised the outstanding work of the Federal Bureau of Investigation and thanked the U.S. Securities and Exchange Commission for its assistance and cooperation in the investigation.

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