|Chipotle Stock Securities Fraud Class Action Lawsuit|
- Friday, 05 October 2012 03:00
Chipotle Stock Securities Fraud Class Action Lawsuit
By Kimberly Mirando
Chipotle Mexican Grill, Inc. (NYSE: CMG) has been hit with a class action securities fraud lawsuit accusing the fast-casual, Mexican food restaurant chain of misrepresenting and/or failing to disclose adverse facts concerning its financial prospects.
The Chipotle securities class action lawsuit is the latest legal blow for the company, which was recently hit with two consumer class action lawsuits over its alleged policy of rounding-up customer bills and for allegedly falsely advertising that its pinto beans do not contain pork.
According to the Chipotle securities fraud class action lawsuit, Chipotle executive officers made the following misrepresentations and/or hid the following adverse facts that caused Chipotle stock to drop 22% -- the largest one-day stock decline in the company’s history – on July 20, 2012:
(1) Chipotle did not have the pricing power to implement price increases sufficient to offset rising food costs, and as a result the Company’s margins would be under pressure as Chipotle would be unable to pass through these commodity costs to consumers;
(2) demand for Chipotle was slowing due to the economy and increased competition, and could not support the Company’s aggressive 2012 earnings forecasts; and
(3) Chipotle was experiencing a deceleration of growth as it was becoming a mature company.
The Chipotle securities class action lawsuit is brought on behalf of all investors who purchased Chipotle stock between February 1, 2012 and July 19, 2012.
Were you a victim of stock fraud, securities fraud or investment fraud? You may have a case to file class action lawsuit against the parties responsible. Visit the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation for details.
Updated October 5th, 2012
All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions
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Last Updated on Thursday, 27 December 2012 11:09