SEC Targets Fund Adviser Jonathan Larmore in $35 Million Case

Posted on December 19th, 2023 at 1:35 PM
SEC Targets Fund Adviser Jonathan Larmore in $35 Million Case

From the desk of Jim Eccleston at Eccleston Law 

The Securities and Exchange Commission (SEC) has filed fraud charges against ArciTerra Companies LLC, a real estate investment firm based in Phoenix, and its CEO, Jonathan M. Larmore.

According to the DIWire, the SEC alleges that Larmore and entities under his control engaged in a multi-year scheme, misappropriating over $35 million from investor funds managed by ArciTerra. The complaint states that since at least January 2017, Larmore directed funds for personal use, including payments for personal credit card bills for his wife, Michelle Larmore, and children. The SEC contends that Larmore treated one of the entities as his personal bank account, financing a lavish lifestyle that involved private jets, yachts, high-end cars, and expensive residences.

The complaint further alleges that Larmore and Cole Capital Funds, founded by Larmore, released a misleading press release in November 2023. The release falsely claimed that Cole Capital intended to acquire 51% of all minority ownership shares in WeWork Inc. at $9 per share, a figure over nine times WeWork's then-current trading price. Allegedly, WeWork's stock experienced a nearly 150% surge in after-hours trading following the press release.

The complaint asserts that Larmore acquired more than 72,000 call options in WeWork at a price significantly below the stock price in the days preceding the release. His intention was to profit by executing the trades after manipulating the stock price. However, due to a delay in the release, the majority of the options expired before Larmore could exercise them.

The SEC's complaint accuses Jonathan M. Larmore, ArciTerra, and various affiliated entities under Larmore's control of violating the antifraud provisions of federal securities laws. The complaint seeks permanent injunctive relief, the appointment of a receiver, disgorgement with prejudgment interest, civil penalties, and additional relief.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

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