Plaintiff’s lawyer says going after Gustavo Arenal’s assets in the meme-stock case would have been ‘crash and not economical’.
In an amended 100-page complaint filed on Tuesday, Mr Arnal is no longer listed as a defendant. The original 24-page complaint claimed that Mr. Arnal and Mr. Cohen colluded to boost the company’s share price. The original filing did not provide evidence of such interactions between the two men. Bed Bath & Beyond has said the lawsuit was without merit.
Mr. Arnal, 52, died of suicide in early September amid growing financial woes at the retailer, and shortly after he was charged with the original complaint of selling Bed Bath & Beyond shares in possession of material insider information. He sold about $1.4 million worth of stock in mid-August as part of a pre-arranged business plan, filings show.
Bed Bath & Beyond and Mr. Cohen, along with JPMorgan Securities LLC, are still named as defendants in the suit, which seeks class-action status. The revised filing alleges that Mr. Cohen “planned market manipulation” by defrauding retail investors that he would withhold their investments, drive up Bed Bath & Beyond’s share price, and then “secret” his holdings in the company. will sell”.
Bed Bath & Beyond and Mr C declined to comment. Mr Cohen did not immediately respond to a request for comment on Wednesday. Mr Cohen had previously declined to comment. Mr Arnal did not respond to the trial before his death.
Records show that there was no direct communication between Messrs. Cohen and Arnal and that they only interacted on a conference call involving other officials, people familiar with the matter had previously told the Wall Street Journal.
Mr. Cohen, online retailer Chewy. co-founder of Inc.,
In March it unveiled a stake in Bed Bath & Beyond and called on its management to consider strategic options. Bed Bath & Beyond then added new members to its board and said in June that chief executive Mark Tritton would leave. Mr Cohen divested his entire stake in Bed Bath & Beyond in mid-August.
Shares of Bed Bath & Beyond traded at about $4.05 on Wednesday, down more than 70% from the start of the year.
The amended complaint adds details based on publicly available information, for example Mr. Cohen’s acquisition of videogame retailer GameStop. Corporation
However, the discovery process, which is part of the initial phase of the litigation, when both parties gather evidence through statements, has not yet begun, said Mr Toll, about alleged collusion between Mr Cohen in the original complaint. Nothing has been learned. and Mr. Arnal.
Mr Toll said he had not heard from Bed Bath & Beyond or Mr Arnal’s estate until the filing of an amended complaint. It was expected that the defendants have not yet been prosecuted, which is one of the next steps in the case, Mr Toll said.
A deadline is approaching November 7 for investors to claim he should lead the case. A principal litigant could be appointed by the end of the year or as early as next year, Mr Toll said. US District Judge Trevor McFadden said Wednesday that the amended complaint be filed again to highlight changes from the initial version. Mr Toll said he expected to do so in the next day or two.
In the weeks following his death, Mr Arnal was asked by emails from investors and plaintiffs’ attorneys about the August sale of some of his company’s holdings, The Wall Street Journal reported in September. He told coworkers he was tense about noticing the sale of his stock and told it was pre-planned, the Journal reported.
The company last week appointed Sue Gove as its permanent chief executive officer. Ms. Gove, who was on the board of Bed Bath & Beyond, became interim chief executive at the end of June. In early September the retailer named Laura Crosson as interim CFO.
—Suzanne Kapner and Kristin Broughton contributed to this article
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