Bed Bath & Beyond Sues Ryan Cohen Over Alleged Insider Trading

In a surprising turn of events, the company formerly known as Bed Bath & Beyond Inc. has filed a lawsuit against Ryan Cohen and his investment firm, RC Ventures LLC. The complaint claims that Cohen and his associates made a whopping $47 million through alleged insider trading back in 2022.

Cohen, who is well-known for founding the pet food retailer Chewy Inc. and leading the video game retailer GameStop Corp., is said to have used insider information to make profitable trades on Bed Bath & Beyond stock while acting as a director during the first half of 2022.

According to the lawsuit filed in the U.S. District Court for the Southern District of New York, Cohen and his firm made numerous profitable trades on Bed Bath & Beyond’s shares between January and August 2022. The company claims these trades fall under a specific rule that allows recovery of profits made from trades within a six-month period by statutory directors or those who own a significant portion of the company’s stock.

Bed Bath & Beyond argues that Cohen and his team had significant access to insider information that gave them an unfair advantage in the stock market. The lawsuit is part of broader efforts by the bankrupt company to recoup funds for its creditors, which includes pursuing over $300 million in trading profits from another hedge fund, Hudson Bay Capital Management.

Michael Goldberg, the bankruptcy plan administrator for the company, is also working on multiple fronts to recover funds, including claiming about $19 million in tax credits owed under economic development contracts.

Currently, RC Ventures holds an 8.7% stake in GameStop Corp., making them the largest shareholder. As the situation unfolds, neither Cohen nor RC Ventures has commented officially on the lawsuit as of yet.