Bed Bath & Beyond CFO Who Plunged To His Death Named In Lawsuit For Inside Trading, Fraud

Gustavo Arnal, the Bed Bath & Beyond Chief Financial Officer found dead on Friday, was recently named in a lawsuit accusing him of fraud.

Arnal fell from the 18th floor of an apartment building less than two weeks after the 52-year-old executive was named in a federal class-action lawsuit on allegations of federal securities fraud, insider trading, and breach of fiduciary duty.

Before his death, Bed Bath & Beyond announced closing 150 stores and cutting 20% of its corporate staff, Business Insider reported.

Arnal is referenced in the suit “Under this arrangement, defendants would profit handsomely from the rise in price and could coordinate their selling of shares to optimize their returns,” court documents state.

He allegedly worked with JPMorgan, listed as a defendant in the lawsuit on allegations it “aided and abetted” the plan by “enabling Cohen to use JPM’s accounts to effectuate such transactions and otherwise launder the proceeds of their criminal conduct.”

The lawsuit also notes Cohen’s involvement in similar plans, such as elevating GameStop to “meme stock” status.

“Cohen has historically employed pump and dump schemes to raise much-needed capital and has ignited several meme stocks to jaw-dropping heights,” the lawsuit continues, with activist investor and GameStop chairman Ryan Cohen, who the suit says worked with the CFO in a “fraudulent scheme to artificially inflate the price of Bed Bath & Beyond’s publicly traded stock.”

The suit was filed in United States District Court for the District of Columbia late last month and claimed that both Cohen and Arnal provided “materially false statements regarding the financial condition and holding situation” of the retail company for their financial benefit. The lead plaintiff is investor Pengcheng Si.

“The defendants, knowing that the information they disclosed was false, took advantage of the inflated stock price and used fraudulent and misleading SEC filings to sell all their [Bed Bath & Beyond] shares and options at artificially inflated prices to unsuspecting and innocent public investors and then retained control of the profits,” the suit states. 

On August 18, Arnal and Cohen sold shares of the company, causing shares to plummet.

The suit accuses Cohen of approaching the CFO about his “pump and dump” scheme in March 2022 and then “convinced Gustavo that their plan would be a mutually beneficial one.”

“Under this arrangement, defendants would profit handsomely from the rise in price and could coordinate their selling of shares to optimize their returns,” the lawsuit states. 

Arnal allegedly worked with JPMorgan, which is listed as a defendant in the suit, on claims the bank “aided and abetted” the plan by “enabling Cohen to use JPM’s accounts to effectuate such transactions and otherwise launder the proceeds of their criminal conduct.”

“Cohen has historically employed pump and dump schemes to raise much-needed capital and has ignited several meme stocks to jaw-dropping heights,” the lawsuit states.