Shareholders have filed a suit against Chipotle Mexican Grill Inc. alleging top executives violated fiduciary responsibilities and committed insider trading, reports Colorado Public Radio. (The suit was filed in Denver District Court). The suit claims that under a “corrupt stock incentive plan,” top Chipotle management “dealt themselves excessive compensation worth hundreds of millions of dollars.” Chipotle’s stock buyback programs to the tune of $1.9 billion kept its stock price “artificially inflated,” the lawsuit alleges. Recent food illness outbreaks were also subjects of the lawsuit’s claims, stating that the company misrepresented its adherence to industry standards. The lawsuit also claims that during this so-called artificial inflation of Chipotle stock price, “a majority of the board of directors (and a supermajority of the Individual Defendants) engaged in lucrative insider sales, reaping millions of dollars in net proceeds.” Chipotle along with the company’s co-chief executive officers, Steve Ells and Montgomery Moran, and several other top executives were named as defendants on the case, filed in court April 6.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News