REPORT: SEC Sends Inquiries To Investor Over WeWork Acquisition Offer

The Securities and Exchange Commission sent inquiries to real estate investor Jonathan Larmore, founder of Arciterra Cos., regarding a Nov. 3 press release in which Cole Capital Funds offered to buy WeWork shares, Bloomberg reports, citing anonymous sources.

A company filing links Larmore to Cole, Bloomberg reported. Larmore told the publication on Monday that he planned to make the necessary filings to facilitate the purchase offer but wouldn't otherwise comment.

Neither Larmore nor the SEC responded to queries from Bisnow on the matter. An investigation by the commission doesn't necessarily mean an accusation of wrongdoing. 

Since the release was quickly removed from most sites, it is unclear how serious Cole’s offer was. WeWork, which filed for bankruptcy last week, declined to comment when reached by Bisnow via email Tuesday. 

The release came days before WeWork's bankruptcy filing and temporarily doubled the coworking company's share price in after-hours trading. Cole's offer, as stated in the release, communicated to WeWork’s board that it wanted to purchase 51% of the struggling coworking company for $9 per share, a sizable premium to WeWork's share price.

“We believe that it is in the best interest of WeWork to support our acquisition of 51% of all the outstanding shares owned by minority stakeholders at a price of $9.00 per share and provide Cole with proper representation on the company board,” the release says.

WeWork’s stock jumped from 84 cents per share to $1.99 per share in the course of roughly an hour in extended trading Nov. 3 before coming back down to about $1.20 per share after the release was removed from many platforms.

Larmore and Arciterra Cos., which mostly owns strip centers and has assets totaling $570M, have previously been accused of misusing investor money. Earlier this year, investors filed a lawsuit against Larmore in Illinois, alleging that he used client funds to pay for a private jet, a yacht and a party for his dog, Bloomberg reported. The plaintiffs later withdrew that suit, but it may be refiled in Arizona.

Larmore called those allegations baseless, according to Bloomberg.