Chipotle Mexican Grill (CMG) has been hit with a class action lawsuit contending the restaurant chain misled investors by mischaracterizing customer complaints about reduced serving sizes in some of its regulatory filings earlier this year.
In a suit filed Monday in federal court in Los Angeles, plaintiff Michael Stradford alleged former Chipotle chief executive Brian Niccol, current chief financial officer John Hartung and others had a hand in drafting, reviewing and disseminating materially false and misleading statements in the company's filings with the US Securities and Exchange Commission.
Attorneys for Stradford argue the defendants intentionally understated customer complaints on social media and other venues that Chipotle was serving up with "highly inconsistent (and in the view of some customers, lacking) portion sizes" in a bid to bolster profitability. Chipotle initially rejected those assertions although Niccol in July reportedly said during a Q2 earnings call that it was working with employees to provide "generous portions" to customers more consistently.
A Chipotle spokesperson said the company doesn't comment on litigation in response to a request for comment from MT Newswires.
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