Popular Articles
Today Week Month Year


WeWork’s ex-CEO Adam Neumann investigated for criminal self-dealing
By News Editors // Nov 19, 2019

When we first learned about former WeWork CEO Adam Neumann's practice of buying commercial properties (or shares in said properties), and then leasing them back to WeWork (often at an inflated rate), we knew that if Neumann had gotten away with such blatant self-dealing without a peep from the board, then WeWork's governance problems were probably far more extensive than the public realized at the time (this is roughly one year before WeWork's vision of a future powered by "We" came crashing down as the IPO was scrapped).

Brighteon.TV

(Article by Tyler Durden republished from ZeroHedge.com)

But here we are, more than a year later, and the proper authorities are finally getting involved. According to Reuters, New York State AG Letitia James is investigating the company and its former CEO. Specifically, investigators are looking into whether Neumann engaged in illegal self-dealing.

Did he? Well, Neumann had no qualms about enriching himself by using his company as a backstop for his personal investments, leveraging WeWork's power as a lessor to worm his way into deals by touting his ability to bring on an anchor tenant willing to pay above-market rates. Neumann also personally bought the trademark to the word "We", then charged his company $6 million to transfer the trademark (he later returned the money). When it came time to prepare the original WeWork pre-IPO prospectus, Neumann came up with an ownership structure that, as he put it, would leave his family in charge of WeWork for "the next 300 years" as he once reportedly bragged.

And when it all came crashing down, and WeWork's valuation plunged to under $10 billion from north of $55 billion in the span of a few weeks, SoftBank, WeWork's most fervent backer, was forced to either accept a massive loss, or put up more money for a turnaround.

When the buyout came, Neumann still walked away with a $1.7 billion payday. He's off enjoying early retirement while a SoftBank-installed management team is desperately trying to figure out how to stave off bankruptcy at WeWork.

The company is now facing a radical restructuring: Some 4,000 employees, roughly one-third of WeWork's global workforce, will likely be laid off before the end of the week. Employees who don't support WeWork's core mission will be let go, while the rest will learn on Friday what their new roles will be. Executive Chairman Marcelo Claure, a SoftBank exec, has been installed at the top to try and lead the WeWork turnaround.

Unfortunately for Neumann, federal authorities also seem to have taken an interest. The Reuters report followed a trial balloon published by Bloomberg claiming the SEC was looking into whether WeWork violated financial rules as it pursued its public listing.

Amid the furor, WeWork's bonds have continued their slide to ever-lower lows.

After using his tremendous salesmanship abilities to sell WeWork as more than just a real-estate company, it looked like Neumann would get away with the outrageous swindle that was WeWork. But after taking SoftBank's Masayoshi Son for another $2 billion, it looked like Neumann had pressed his luck: nobody can be that blatant and not trigger an investigation.

Meanwhile, WeWork's social media accounts are laying it on thick:

https://twitter.com/WeWork/status/1196541192172920833

Read more at: ZeroHedge.com



Take Action:
Support NewsTarget by linking to this article from your website.
Permalink to this article:
Copy
Embed article link:
Copy
Reprinting this article:
Non-commercial use is permitted with credit to NewsTarget.com (including a clickable link).
Please contact us for more information.
Free Email Alerts
Get independent news alerts on natural cures, food lab tests, cannabis medicine, science, robotics, drones, privacy and more.

NewsTarget.com © 2022 All Rights Reserved. All content posted on this site is commentary or opinion and is protected under Free Speech. NewsTarget.com is not responsible for content written by contributing authors. The information on this site is provided for educational and entertainment purposes only. It is not intended as a substitute for professional advice of any kind. NewsTarget.com assumes no responsibility for the use or misuse of this material. Your use of this website indicates your agreement to these terms and those published on this site. All trademarks, registered trademarks and servicemarks mentioned on this site are the property of their respective owners.

This site uses cookies
News Target uses cookies to improve your experience on our site. By using this site, you agree to our privacy policy.
Learn More
Close
Get 100% real, uncensored news delivered straight to your inbox
You can unsubscribe at any time. Your email privacy is completely protected.