Chipotle Sued for Misleading Investors About Food Safety Scandal

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Chipotle’s investors have filed a lawsuit against the company for failing to disclose food safety records

This is just one of a number of lawsuits and legal issues Chipotle is facing.

As predicted by financial analysts, Chipotle’s woes and PR nightmares are just beginning. The newest lawsuit to hit the burrito chain following several food safety scandals comes from Chipotle’s investors, who have sued Chipotle for failing to disclose food safety records of poor quality controls following the E. coli outbreak.

The lawsuit has been filed with the U.S. District Court for the Southern District of New York, and seeks damages on behalf of investors who acquired Chipotle shares over the past year, according to court records obtained by Reuters.The investors are alleging that, “quality controls were inadequate to safeguard consumer and employee health,” and had they known more information, would likely have withdrawn or altered their investment plans.

Last week, Chipotle was hit with a federal subpoena and ordered to turn over documents pertaining to food inspection records. The burrito chain has also been sued by several individuals who were sickened after eating there in recent months.

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Shares of Chipotle have dropped at least 35 percent since October when news first started to break of the food safety issues that sickened hundreds and temporarily closed at least 50 Chipotle locations across the country.