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GameStop (GME) CEO and activist investor Ryan Cohen won the dismissal of a shareholder lawsuit that accused him of cashing out too quickly from Bed Bath & Beyond, Reuters reported.
A judge ruled that the two former Bed Bath shareholders who filed the lawsuit could not force Cohen to return profits from his stake sale, saying the company’s bankruptcy mooted their claims.
The judge also rejected their arguments that they still had a financial stake as they’d bought stock in a Bed Bath creditor and deserved reimbursement for their stock that was canceled when the Chapter 11 plan became effective.
Cohen, often called the meme stock king, disclosed a 9.8% stake in Bed Bath in March 2022 and urged the retailer to explore alternatives, including a full sale or separating its Buy Buy Baby business.
Just five months later, he abruptly sold his stake for an estimated $60M profit, infuriating other shareholders.
The former shareholders had sued Cohen in 2022 under a federal law that requires corporate insiders to give up “short-swing” profits from buying and selling shares within a six-month timeframe.
Beyond (BYON), formerly Overstock, acquired the Bed Bath & Beyond brand in 2023 and its associated intellectual property.
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