March 24, 2023

This Accidental Death The former chief financial officer of Bed, Bath & Beyond has raised further questions about the troubled retail chain and highlighted its precarious financial situation in the fraud allegations against him.

Shares of Bed, Bath & Beyond tumbled on Tuesday, down 15% to $7.18 a share in early trade. The retailer’s stock has lost more than 70% of its value in the past year.

The company’s chief financial officer, Gustavo Arnal, jumped to his death Friday from a luxury skyscraper in downtown Manhattan. The New York City Medical Examiner’s Office ruled that his cause of death was suicide.

The 52-year-old executive’s death comes as the once-popular retailer struggles to turn things around after declining sales since last year. Arnal was also named as a defendant in a securities lawsuit that accuses him, his employer and billionaire entrepreneur Ryan Cohen of a pump-and-dump scheme to inflate shares of Bed, Bath & Beyond.

The company did not answer questions about the CBS MoneyWatch lawsuit. GameSpot, where Cohen serves as chairman, did not respond to a request for comment.

On Tuesday, Bed Bath & Beyond named Laura Crossen as interim chief financial officer. The company called Anal’s death a “shocking loss” on its website.

“Gustavo will be remembered by all who worked with him for his leadership, talent and stewardship of our company. I am proud to be his colleague, and all of us at Bed Bath & Beyond and owners are delighted to know him, ” company chairman Harriet Edelman said in a statement.

Stocks soar — and then lawsuits

Shares of Bed, Bath & Beyond have been on a roller coaster 2020’s “meo pack” craze Before fading last year. The stock surged again in March when Cohen, founder of online pet products company, revealed that he had a nearly 10% stake in the company.

Cohen is credited with turning a corner at GameStop, and retail investors see his ownership as a positive sign for Bed, Bath & Beyond. To kickstart the home-goods company’s recovery, he quickly helped the CEO and CMO of Bed, Bath & Beyond out the door and named two new directors.

Cohen filed additional documents with the Securities and Exchange Commission on Aug. 16, reaffirming his ownership of Bed, Bath & Beyond.This leads to the stock soaring againBut that same day, Cohen immediately began selling his stake, sparking a sell-off that saw the company’s stock drop to a third of its original price within a week.

That prompted some to call for an SEC investigation and a shareholder lawsuit, alleging securities fraud, was filed Aug. 23 in Washington, D.C. District Court.

lawsuits seeking class action status, claim Cohen, Arnal, JPMorgan, and others “participated in a fraudulent scheme to artificially inflate the price of BBBY’s publicly traded shares” and “blatantly misrepresent BBBY’s value and profitability” to lure retail investors into buying the stock.

According to the lawsuit, Cohen and Anal hatched a plan in which Cohen would publicly hype the company’s stock, while Anal would limit insider sales of the stock, driving up its price. The complaint also alleges that Cohen lied when he reaffirmed his ownership of the company and claimed he had begun selling his stock at the time.

Arnal also sold 55,000 shares of Bed, Bath & Beyond on Aug. 16, though his disclosures said the sale was planned to begin in April.

Cohen and Anal “engaged in illegal insider trading and fraudulent SEC reporting,” the lawsuit said. It also alleges that the duo “used inflated stock prices, used fraudulent and misleading SEC filings to sell all of their BBBY stock and options at artificially inflated prices to unsuspecting innocent public investors, and then Retain control of profits.”

Bed, Bath & Beyond tells investors Aug. 31 Securities filing “The company is in the early stages of evaluating the complaints, but based on current knowledge, the company believes these claims are baseless.”

Ineffective leadership

Even before the shareholder lawsuit, Wall Street’s view of Bed, Bath & Beyond had soured. After Cohen liquidated his holdings, analysts at Wedbush downgraded the stock, saying the price was “out of touch” with the company’s fundamentals.

“Bed, Bath & Beyond” finds itself in an enviable position as it faces massive market share losses, excess inventory and dwindling cash reserves, they wrote. “even though [Bed, Bath & Beyond] Having successfully achieved some operational targets in the coming quarters, we believe the current risk/reward is disproportionately skewed to the downside. “

The retailer received $500 million in new financing and outlines another shift plan These include closing 150 stores, laying off one-fifth of the workforce and reducing store brands. It’s still looking for a new CEO and chief marketing officer.

If you or someone you know is in emotional distress or a suicidal crisis, please call the National Suicide Prevention Hotline at 1-800-273-TALK (8255).

For more information on mental health care resources and supports, please call 1-800-950-NAMI (6264), Monday through Friday, 10am-6pm EST, or email info@ National Alliance on Mental Illness (NAMI) Helpline

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