The former owner of Fishermen's Village in Punta Gorda was convicted of fraud charges on Tuesday.
Jonathan Moynahan Larmore, 51, was convicted of tender offer fraud and securities fraud in connection with his announcement of a fake tender offer to manipulate the stock price of WeWork, Inc. and drive up his stock options.
According to the United States Attorney's Office news release, the verdict followed a one-week trial and Larmore will be sentenced on March 4, 2025.
U.S. Attorney Damian Williams issued the following statement in the news release:
"Last November, Jonathan Moynahan Larmore orchestrated a scheme to trick the market and prey upon investors by artificially inflating the value of WeWork stock for his personal enrichment. Less than a year later, Larmore stands convicted by a jury of his peers. This case should be a reminder that we remain vigilant and ready to bring swift justice to those who undermine the integrity of our markets and defraud innocent investors.”
According to evidence presented in court, Larmore executed his scheme in three steps. On Oct. 6, 2023, Larmore created Cole Capital Funds LLC ("Cole Capital"), a real estate investment firm that was determined to be a sham company. Then, around Nov. 1 and 2, Larmore spent more than $775,000 buying tens of thousands of cheap, short-dated, out-of-the-money WeWork call options. The vast majority of these were set to expire on Nov. 3 at 4 p.m. EDT.
He also tried to act on hundreds of thousands of shares of WeWork common stock. This was primarily because two of Larmore's brokerage firms did not authorize him to trade options but did authorize him to buy equities.
According to court documents, Larmore chartered a yacht and attempted to travel into international waters to make these trades. This was in hopes of escaping U.S. jurisdiction.
The third step happened around Nov. 3, when Larmore had a press release published announcing Cole Capitol proposed to acquire 51% of all outstanding shares owned by minority shareholders of WeWork.
This motion came at a more-than-700% premium in an all-cash offer worth more than $77 million.
WeWork was on the verge of bankruptcy at the time.
According to the documents, the press release itself had a number of false and misleading claims about Larmore, Cole Capital and their ability to carry through with the purported tender offer.
Officials said neither Larmore nor Cole Capital had the intent or ability to execute the announced tender offer. Larmore instead intended for news of the tender offer to fraudulently inflate WeWork's share price and increase his newly acquired WeWork call options and shares.
Within one minute of publication, in after-hours trading, WeWork's share price increased more than 70% from $.85 to $1.45 and continued until the stock reached its high of $2.14.
Officials said the WeWork call options Larmore purchased could have made him millions if the fraudulent tender offer had caused WeWork's share price to increase significantly prior to when Larmore's options expired.
Larmore mistimed how long it would take to properly format his press release and have it published.
Larmore's press release was not published, and WeWork's share price did not accordingly rise until around 5:12 p.m. on or about Nov. 3. This was about an hour after the majority of Larmore's WeWork call options expired and became worthless around 4 p.m. that day.
WeWork filed for Chapter 11 bankruptcy protection on Nov. 6, 2023. Around Nov. 10, the small number of remaining WeWork options Larmore purchased expired.
Larmore was convicted of one count of tender offer fraud and one count of securities fraud. Each charge carries a maximum sentence of 20 years in prison, according to the U.S. State Attorney's Office.
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