GameStop billionaire CEO Ryan Cohen faces a lawsuit by a company once known as Bed Bath & Beyond and must recover $47.2 million in profits from trading shares before a residential goods retailer goes bankrupt.
On Friday, U.S. District Judge Naomi Reiss Buchold in Manhattan said Cohen and his RC venture must defend claims that sold more than 10% of bed bath stakes purchased within six months, and must be responsible for repaying “short swing” profits as insiders.
Cohen claimed he had no idea that his shares had risen 10% when he invested in March 2022, as retailers were quietly buying back their own shares.
However, the judge said that Bed Bath has disclosed a buyback program and that Cohen’s investments so large without considering disclosure to investors “struggling” “credibility.”
Cohen suddenly sold his bedbas stake in August 2022, earning an estimated $60 million in profit.
Cohen’s lawyers did not immediately respond to requests for comment Monday. The plaintiff’s lawyers and GameStop did not respond immediately to similar requests. GameStop, a video game retailer, is not a defendant.
Bokwald also dismissed the claim that the defendant was liable as “director by substitution” as he acquired three bed bath board sheets to avoid the power of attorney fight.
Cohen became known as the “Meme King” by ordinary investors who drove the meme stock outbreak in early 2021.
He is worth $4.3 billion, and also founded Chewy, a retailer of online PET Supplies, according to Forbes Magazine.
Bed Bath filed for bankruptcy in April 2023. Online retailer Overstock.com later acquired its name and trademark and is known as Beyond.
Last June, another judge dismissed a lawsuit by former Bedbus shareholders over Cohen’s profits as bankruptcy discussed their claims.
Cases were made in 20230930-DK-Butterfly-1 Inc v Cohen et al, US District Court, Southern District of New York, No. This is 24-05874.
