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WeWork faces SEC inquiry over possible rule violations: Bloomberg


(Reuters) — WeWork is facing scrutiny from the U.S. Securities and Exchange Commission over whether it violated financial rules in the run-up to its abandoned initial public offering, Bloomberg reported Friday, citing two people with knowledge of the matter.

The SEC’s inquiry is preliminary and may not lead to any allegations of wrongdoing, Bloomberg reported, adding that it could not determine whether specific WeWork business decisions or transactions prompted the review.

WeWork shelved its IPO in September after investors grew wary of its losses, business model and corporate governance that had forced former Chief Executive Officer and co-founder Adam Neumann to resign.

Mr. Neumann and other WeWork officials are also being sued by minority shareholders who accuse the company’s board of directors of breaching its fiduciary duties.

Masayoshi Son, chairman of SoftBank Group which took control of WeWork last month, is also one of the defendants in the case.

The regulator’s enforcement division is reviewing WeWork’s business and its disclosures to investors after media reports showed conflicts of interest and the company’s fundraising, according to the report.

WeWork has retained top Wall Street lawyer Andrew Ceresney, who previously headed the SEC enforcement unit, Bloomberg reported.

WeWork and the SEC declined to comment.

Earlier this week, The We Co., which owns WeWork, said net losses in the third quarter more than doubled to $1.25 billion.



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