Robbins Arroyo LLP: Chipotle Mexican Grill, Inc. (CMG) Misled Shareholders According to a Recently Filed Class Action
Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed in the U.S. District Court for the Southern District of New York. The complaint alleges that officers and directors of Chipotle Mexican Grill, Inc. (NYSE: CMG) violated the Securities Exchange Act of 1934 between February 4, 2015 and January 5, 2016, by making materially false and misleading statements about Chipotle’s business prospects. Chipotle, together with its subsidiaries, develops and operates fast-casual and fresh Mexican food restaurants.
Chipotle Undergoes Criminal Investigation Due to Multiple Health Incidents
According to the complaint, Chipotle failed to disclose to investors that its quality controls were neither in compliance with consumer and workplace safety regulations, nor adequate to safeguard consumer and employee health. Over the past several months, Chipotle has been the subject of multiple health investigations stemming from an incident that occurred during the week of August 18, 2015, when approximately 100 patrons and employees of a Chipotle restaurant in Simi Valley, California became ill. On September 4, 2015, the Ventura County Environmental Health Division announced that the illnesses were a norovirus outbreak. Health inspectors said that the restaurant in question contained dirty and inoperative equipment, equipment directly linked to the sewer, and other sanitary and health violations. Between August 19 and September 3, 2015, an additional approximately 64 people fell ill after eating Chipotle in Minnesota. On September 17, 2015, the Minnesota Department of Health announced that the illnesses were due to salmonella linked to tomatoes consumed at 22 Chipotle locations. The affected restaurants changed tomato suppliers but did not close.
Chipotle continued to be afflicted by more health incidents. On November 1, 2015, Chipotle closed all of its restaurants in Portland, Oregon, and Seattle, Washington, following reports of about 20 cases of E. coli by Chipotle patrons. Then, around December 2, 2015, more than 140 Boston College students fell ill after eating Chipotle in Brighton, Massachusetts due to another norovirus outbreak at the restaurant. On January 6, 2016, Chipotle announced that it was served in December 2015 with a federal grand jury subpoena as part of a criminal investigation tied to the previous summer’s norovirus outbreak at its Simi Valley restaurant. The investigation is being conducted by the U.S. Attorney’s Office for the Central District of California in conjunction with the Food and Drug Administration. Chipotle stock declined throughout these various health incidents, falling from $745.92 per share on August 18, 2015, to close at $426.67 on January 6, 2015.
Chipotle Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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