From Bed Bath And Beyond - To The World Beyond

A Bed Bath & Beyond exec was facing a $1.2 billion “pump-and-dump” stock-fraud suit when he apparently leaped to his death from his swank 18th-floor apartment in Lower Manhattan last week.

Gustavo Arnal, who was the chief financial officer of BBB, is among the defendants named in a class-action suit that accuses him, Chewy.com founder Ryan Cohen and others of artificially inflating the troubled housewares giant’s share price.

The class-action complaint, filed Aug. 23 in Washington, DC, federal court, alleges that the scheme also involved “a classic attempt to spark a gamma squeeze.”

That tactic relies on the purchase of stock options and was employed during last year’s GameStop stock trading frenzy, according to The Motley Fool website.

Cohen, the chairman of GameStop, came under fire last month for making $68.1 million in profits by unloading a stake in BBB that reportedly included 7.78 million shares and options to purchase another 1.67 million.

Cohen’s lucrative 56% gain came about seven months after he first invested in BBB.Bed Bath & Beyond CFO Gustavo Arnal was facing a $1.2 billion stock fraud lawsuit when he jumped to his death from his Manhattan apartment building

On Aug. 16, the same day Cohen cashed out, Arnal sold 42,513 shares of BBB stock worth more than $1 million, the MarketBeat website reported at the time.

On Sunday, Reuters said its calculations showed that Arnal had actually sold 55,013 shares but didn’t say how much he netted.

Arnal died Friday in what cops believe was a suicide plunge at 12:20 a.m. from his apartment at 56 Leonard St., a skyscraper known as the “Jenga building” because of its unique exterior, which resembles an uneven stack of blocks.

After the disclosure of Cohen’s and Arnal’s stock sales Aug. 17, shares in BBB fell from a “record high $30” to $8.78 on Aug. 23, according to the suit.

In court papers, plaintiff Pengcheng Si of Falls Church, Va., said she and her spouse bought 8,020 shares of BBB “at artificially inflated prices” between March 25 and Aug. 18 “and have suffered realized and market losses of approximately $106,480.”

Total damages to all BBB shareholders, including the company’s interests, were about $1.2 billion as of Aug. 23, according to the suit.

Other defendants in the suit include JP Morgan Securities, which is accused of helping Cohen and Arnal “effectuate” their sales “and otherwise launder the proceeds of their criminal conduct.”

BBB, which is named as the lead defendant, is accused of making a “materially false and misleading statement” in an Aug. 18 Securities and Exchange Commission filing that said, “We are pleased to have reached a constructive agreement with [Cohen’s] RC Ventures in March and are committed to maximizing value for all shareholders.”

In a statement posted on its website, BBB acknowledged Arnal’s death and said the company was “profoundly saddened by this shocking loss.

“Gustavo will be remembered by all he worked with for his leadership, talent and stewardship of our company,” Board of Directors Chair Harriet Edelman said.


If you are struggling with suicidal thoughts or are experiencing a mental health crisis and live in New York City, you can call 1-888-NYC-WELL for free and confidential crisis counseling. If you live outside the five boroughs, you can dial the 24/7 National Suicide Prevention hotline at 988 or go to SuicidePreventionLifeline.org.

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Mussar Haskel: 

1] Don't steal, lie or cheat. It will only come back to haunt you. Ask the Madoff family. 

2] Money isn't everything. All of the money in the world is not as valuable as one second of life. On one hand, the halacha is that one must give all of one's money [even billions of dollars] in order to avoid chilul Shabbos. On the other hand - all of the Jewish people must be mechalel Shabbos a million times in order to add one second to the life of a Jew!!!

3] I know a lot of very wealthy people. Just about all of them downplay their wealth and present themselves as barely eking out a living or struggling or just getting by etc. etc. It is hard to believe b/c these same people then take a vacation that cost 50k for a week or two or purchase their fourth residence for over a million dollars. I NEVER hear anybody saying [when the subject comes up] "Baruch Hashem. Things are GREAT!!! I have been blessed with sooooo much money. More than I will ever need. Hodu LaShem ki tov!!! It is an amazing feeling to know that I have so much for myself, my family and to share with the less fortunate." It is always "things are rough", "I haven't made a penny this year", "the bank really owns all my properties", "I used to have money"  [a recent one I heard]. Some people actually feel this way and aren't trying to fool you. They have more money than they can use in the next 250 years and they will complain about inflation or how tough things are these days. 

 "It is impossible to feel wealthy if your expectations grow faster than your income.

Former Goldman Sachs CEO Lloyd Blankfein is worth a billion dollars. But he told The Financial Times earlier this year that he considers himself well-to-do, not rich. “I can’t even say ‘rich’,” he said. “I don’t feel that way.”

Let’s assume there’s more than false modesty here. Consider a few points:

Blankfein is not even among the 10 richest people in his own apartment building.

The Bloomberg list of global billionaires stops counting anyone worth less than $4.6 billion. A mere $4.2 billion – four Lloyds – is now socially unmentionable.

To become a top-five earning financier consistently requires earning at least $1 billion in a single year, let alone a lifetime.

Spare Lloyd your tears, but pay attention to two things that affect all of us: People gauge their well being relative to those around them. And rising income tends to raise the gaze of your aspirations as much as your bank account.

A thing that’s obvious but easily overlooked is that feeling wealthy has little to do with what you have. It’s more about the gap between what you have and what you expect. And what you expect is driven by what other people around you have.

It’s been like that forever and for everyone. John D. Rockefeller never had penicillin, sunscreen, or Advil. But a low-income American with Advil and sunscreen doesn't feel better off than Rockefeller, because that’s not how people’s heads work. What would have seemed like magic to Rockefeller became our baseline expectation.

Incomes fall into the same trap. Median family income adjusted for inflation was $29,000 in 1955. In 1965 it was $42,000. Today it’s just over $62,000. We think of the 1950s and 1960s as the golden age of middle-class prosperity. But the median household today has roughly twice the income as the median family of 1955. Part of the disconnect can be explained by lots of people’s expectations being inflated by the lifestyles of a small share of people whose wealth grew exponentially over the last 40 years.

There are a million ways to get more money. But the only way to feel wealthy is to maintain a gap between what you have and what you expect. The expectation part has to be managed as much as the income part. It’s easy to ignore the expectation part because focusing on the income side alone is much more intuitive.

In 2004 the New York Times interviewed Stephen Hawking, the late scientist whose incurable motor-neuron disease left him paralyzed and unable to talk since age 21.

“Are you always this cheerful?” the Times asked.

“My expectations were reduced to zero when I was 21,” Hawking said. “Everything since then has been a bonus,” he replied.

A useful financial skill, too.

 

SWEETEST FRIENDS!!!!! Enjoy what you have!!! You are RIIIIIIIICHHHHH!!! Anyone with a working brain is RIIIIICCCHHHH!!!!!! Anyone with two moving legs is RIIIIICCCHHHH!!!! Anyone who has water coming out of his wall is RIIIIICCCHHHH!!!! Anyone who can see and hear and smell is RIIIIICCCHHHHHHH!!!!! Anyone who travels in an automobile and not on a donkey is RIIIICCCHHHHHH!!!!! The thing that makes you the RICHEEEEESTTTT is that you are a breathing, living member of the Jewish people who knows that there is a Creator ברוך הוא וברוך שמו and meaning in life.