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 after a one-week trial where Larmore was convicted of tender offer fraud and securities fraud.
"Jonathan Larmore treated the stock market like a game he could rig to obtain instant riches at the expense of innocent investors," said Acting U.S. Attorney Matthew Podolsky. "As today’s sentence shows, this Office will continue to advocate for significant penalties against those who manipulate our markets and defraud investors."
Evidence presented during the trial revealed that Larmore, former CEO of Arciterra Companies LLC, orchestrated his scheme in the fall of 2023. He created a fake real estate investment firm called Cole Capital Funds LLC to manipulate WeWork's stock price on the New York Stock Exchange.
Larmore spent over $775,000 acquiring WeWork call options and shares before publishing a false press release on November 3, 2023. The release claimed that Cole Capital proposed an all-cash acquisition of 51% of WeWork's outstanding shares at a substantial premium, despite WeWork nearing bankruptcy. This announcement falsely inflated WeWork’s share price by more than 70% in after-hours trading and continued rising to over 150%.
However, neither Larmore nor Cole Capital intended or had the capability to execute this tender offer. Most of Larmore's call options expired before he could capitalize on them fully. By November 6, 2023, WeWork filed for Chapter 11 bankruptcy protection without any follow-through on the tender offer.
In addition to his prison term, Larmore was sentenced to three years of supervised release with an obligation to perform 500 hours of community service.
Podolsky commended the Federal Bureau of Investigation for its efforts and thanked the U.S. Securities and Exchange Commission for its cooperation in filing a civil action against Larmore.
The case is being managed by 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.