WeWork, Softbank Sued for Investor Fraud Over Failed IPO

In the latest lawsuit over WeWork’s scuttled IPO, investors say the company hoodwinked them by promoting a transformation of the concept of workspace in order to sell hundreds of millions of dollars worth of stock.

The complaint was filed as a class action on behalf of investors who bought shares in the privately held company for 2 1/2 years before the IPO was canceled in September and the value of WeWork plummeted. They allege that WeWork executives and board members overhyped the business plan and downplayed its losses as “strategic investment spending that would lay the foundation for profitability.”