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The executive vice president and chief financial officer of Bed Bath & Beyond who plunged to his death from the 18th floor of a New York City skyscraper on Friday was the subject of a class-action lawsuit alleging that he and majority shareholder, GameStop Chairman Ryan Cohen , had artificially inflated the company’s value in a “pump and dump” scheme.
Gustavo Arnal, 52, and Cohen, are listed as defendants in the class-action lawsuit filed last month in the United States District Court for the District of Columbia.
According to the lawsuit, Cohen approached Gustavo about his plan to accumulate shares of BBBY and assume command of the company’s publicly available shares.
“With control over a significant portion of the public float, Cohen would essentially act as a price support for the stock while Gustavo would act in a similar capacity by controlling the sale of shares by Insiders,” the lawsuit says. “Under this arrangement, defendants would profit handsomely from the rise in price and could coordinate their selling of shares to optimize their returns.”
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Cohen purchased a large stake in BBBY, including call options, on more than 1.6 million BBBY shares with a strike price between $60 and $80 in what, according to the lawsuit, was a “classic attempt to spark a gamma squeeze, in exchange for Gustavo’s assurance that Insiders would not flood … the market with the stock.”
BBBY stock climbed from $4.38 per share on July 1, 2022, to $30 per share on Aug. 17, 2022. Between March and August, Cohen, Gustavo, and JP Morgan Securities LLC — another defendant in the lawsuit — discussed their plan of hyping the stock and exiting their positions of BBBY shares at some point, according to the lawsuit.
Arnal sold 42,513 shares of Bed Bath & Beyond stock on Aug. 16 for more than $1,029,000, according to MarketBeat.com. Following the transaction, Arnal still owned 267,896 shares in the company, valued at more than $6,488,000. By the close of the market on Friday, BBBY was trading at just about $8.63.
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Two days before Arnal’s death, the company announced it was cutting about 20% of its workforce across corporate and supply chain and closing 150 lower-producing stores as part of a broader turnaround plan.
FOX Business has reached out to Bed Bath & Beyond for comments. Cohen could not be reached for comments.
About a week after the lawsuit was filed, Arnal jumped from a tower in Manhattan’s Tribeca section known as the “Jenga Building.” Bed Bath & Beyond confirmed Arnal’s death, saying it wished “to extend our sincere condolences to Gustavo’s family.”
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Arnal previously served as chief financial officer at beauty company Avon and served in multiple executive roles for more than 20 years at Procter & Gamble.
FOX Business’ Stephen Sorace contributed to this report.