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A strip mall investor who attempted to manipulate WeWork stock to inflate his own securities will pay a price of five years in prison.
Jonathan Larmore was sentenced Tuesday by a federal judge after being convicted in October of creating a fake $77M bid to take over the majority of the company’s shares.
In addition to the five years, the 51-year-old Larmore will be required to spend three years in supervised release and complete 500 hours of community service during that time.
“Jonathan Larmore treated the stock market like a game he could rig to obtain instant riches at the expense of innocent investors,” acting U.S. Attorney for the Southern District of New York Matthew Podolsky said in a release. “As today’s sentence shows, this Office will continue to advocate for significant penalties against those who manipulate our markets and defraud investors.”
Larmore was found guilty of acquiring shares and call options of WeWork and then creating a fake all-cash offer from a fake shell company, Cole Capital Funds, that would value shares at a more than 700% premium, the court found. The scheme came in the fall of 2023, when WeWork was on the verge of bankruptcy.
“Neither LARMORE nor Cole Capital had the intent or ability to execute the announced tender offer,” Tuesday’s release says.
Larmore’s actions had a swift and pungent effect.
Within a minute of Lamore putting out a press release from Cole Capital, WeWork's share price increased by more than 70% during after-hours trading and continued to rise, hitting a 150% high over the price of shares before he put out the release, the court said.
Three days later, WeWork filed for bankruptcy.
Larmore was arrested last March. The Securities and Exchange Commission had brought a civil case against him in November 2023.
He owns Arciterra Cos., a real estate company with a portfolio once worth $600M. Fourteen of its properties — which have been taken over by a federal receiver — were auctioned off for $32M in January.
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