A strip mall investor who made a fake $77M tender offer for WeWork in 2023 was found guilty of fraud related to that offer as well as securities fraud in federal court in Manhattan Tuesday.

The federal government alleged that strip mall investor Jonathan Larmore announced a fake tender offer, or a public call for stockholders to sell their stock, in order to hike up the price of WeWork stock.

Larmore had created what the government termed “a sham company,” called Cole Capital Funds LLC, to purchase thousands of stock options and WeWork common stock, according to a press release from the United States Attorney’s Office. He then attempted to use the fake takeover bid to falsely inflate the value of those stock options, the U.S. Attorney’s Office said.

Cole Capital’s press release announcing it wanted to acquire 51% of outstanding shares from WeWork’s minority shareholders in an all-cash, $77M offer was published on Nov. 3. Cole Capital’s offer for WeWork was more than seven times the stock price at the time, Bisnow previously reported.

Larmore was successful in inflating the price of the stock — it rose 150% on Nov. 3 — but he failed to account for the time it would take to get the press release published, so many of his options had expired before he could cash in, the federal government said. WeWork filed for bankruptcy the following Monday.

Larmore’s attorneys had argued that his offer for WeWork was legitimate and that Larmore did not intend to manipulate the company’s stock price.

“Of course we’re disappointed with the jury’s verdict,” Bruce Udolf, one of Larmore’s attorneys, told Bloomberg after the verdict was read.

“We respect it and we plan to appeal,” Udolf said.

Larmore was convicted of 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 U.S. Attorney's Office release said, but "white-collar criminals rarely receive the statutory maximum," Bloomberg noted.

Larmore is also being sued by the SEC for allegedly misappropriating more than $35M of client funds from Arciterra over at least the last seven years, Bloomberg reported.