Billionaire Ryan Cohen is being probed by the US Securities and Exchange Commission (SEC) over his decision to sell shares in Bed Bath & Beyond during the meme stocks frenzy that caused the share price to spike, the Wall Street Journal reported.
Cohen made a profit of nearly $60 million from his sale of an 11.8% stake in Bed Bath & Beyond in August 2022, which came only days after he posted positively about the business on social media.
The media outlet also noted that the regulator has asked Cohen for information about his trades as well as communications with Bed Bath & Beyond officers and directors and is also seeking records from its former and current board members.
In March 2022, Cohen bought an equity stake valued at $120 million in Bed Bath & Beyond, which sparked speculators to bid up the stock by 34% in a single day.
Then in August of that year, Cohen tweeted a picture of the face of the moon in response to a negative news story about Bed Bath & Beyond, selling his entire stake in the company just days later.
A group of investors have filed a lawsuit filed in a Washington DC federal court, alleging that Cohen had knowledge of bad news about the company and used the tweet to spread misinformation to inflate the stock before the sale.
A US judge has called the trading actions "sketchy," although Cohen has denied any wrongdoings.
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