TIME food and drink

Chipotle Slapped With Lawsuit Over E.Coli Outbreak

Investors say they weren't informed about "inadequate" quality controls

Mexican fast food chain Chipotle was sued Friday for allegedly failing to disclose flawed quality controls to investors, after an outbreak of E.coli was linked to the firm’s restaurants.

The company was sued for allegedly failing to disclose to investors that its “quality controls were inadequate to safeguard consumer and employee health,” according to a copy of the complaint obtained by Reuters. The quality concerns have caused Chipotle stock to plummet, the lawsuit alleges, and therefore investors who bought stock between February 2015 and January 2016 are seeking damages. Shares are down 35% since the end of October.

Chipotle declined to comment to TIME.

At least 50 people in nine states have been sickened from a E. coli outbreak linked to Chipotle restaurants late last year. Sales were down 30% in December and Chipotle is also the subject of a federal criminal investigation relating to a norovirus outbreak in California last year.

 

 

 

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