Last Updated on September 5, 2022
The executive vice president and chief financial officer of Bed Bath & Beyond jumped to his death from the 18th floor of a New York City skyscraper on Friday. Gustavo Arnal, 52, 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. Arnal’s suicide came just days after the company announced large scale closures and layoffs.
According to the lawsuit, Cohen approached Arnal about a plan to stock up on shares of Bed Bath and Beyond 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,” reads the lawsuit. “Under this arrangement, defendants would profit handsomely from the rise in price and could coordinate their selling of shares to optimize their returns.”
Cohen had previously purchased a large stake in the company, including call options, on more than 1.6 million Bed Bath and Beyond shares with a strike price between $60 and $80, Fox Business reported. According to the lawsuit, this constituted a “classic attempt to spark a gamma squeeze, in exchange for Gustavo’s assurance that Insiders would not flood … the market with the stock.”
The company’s stock price rose from $4.38 per share on July 1, 2022, to $30 per share on Aug. 17, 2022. Between March and August, Cohen, Gustavo, and J.P. Morgan Securities LLC — another defendant in the lawsuit — discussed a plan to drive up the stock’s price before exiting at some point, the lawsuit alleges.
Arnal sold 42,513 shares of Bed Bath & Beyond stock on Aug. 16 for more than $1,029,000, according to MarketBeat.com. The late CFO still owned 267,896 shares in the company at that time, valued at more than $6,488,000. By the close of the market on Friday, Bed Bath and Beyond shares were trading at just 8.63, Fox Business reported.
Two days before Arnal’s suicide, the company announced it was cutting about 20% of its workforce, largely affecting corporate and supply chain positions. In addition, the company announced that 150 lower performing stores would be closing as part of a rebound plan.
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 sincerest condolences to Gustavo’s family.”