Shady Chipotle Executives Pulled Out Shares Just Before E. coli Outbreak
Chipotle is being slammed with yet another lawsuit. Several major shareholders are suing the fast casual food company, claiming that Chipotle executives were doling out a dubious stock incentive plan and sold tens of millions of dollars in shares right before the E. coli and norovirus outbreaks.
Not only that, but according to the lawsuit, the company then repurchased the bad stock and re-sold it “$84 million more than the stock was actually worth.” The Denver-based company’s stock price has since collapsed, leading shareholders and investors scrambling.
The lawsuit claims that the corrupt fiscal plan unjustly rewarded executives “hundreds of millions of dollars through a corrupt stock incentive plan” at the expense of investors.
According to the lawsuit, Chipotle’s CEO Steve Ells, alone sold $78.3 million in company shares, “while the stock price was artificially inflated and before the fraud was exposed,” according to Colorado Public Radio.
Chipotle was also hit with a subpoena earlier this year following a norovirus outbreak, and in a separate lawsuit, investors sued Chipotle for misleading them about the food safety scandal.