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Shareholders Sue Chipotle Claiming Artificially-Inflated Stock Prices

Shareholders Sue Chipotle Claiming Artificially-Inflated Stock Prices

DENVER, CO – Chipotle is under fire from consumers and investors this month. The fresh-focused fast food chain has suffered a slew of breaking headlines in recent months, causing the company’s stock to plummet. And now a group of investors is filing suit, according to Denver Fox affiliate KDVR, claiming that the company deceived them.

In the lawsuit, filed with the U.S. District Court of Colorado, shareholders claim that Chipotle led customers to believe that the company had fixed problems with food safety after several Chipotle patrons at roughly a dozen Chipotle locations contracted norovirus and e.coli in 2015. Shareholders claim that Chipotle hid information about persistent food safety issues from the public, resulting in artificially-inflated stock prices.

Had these shareholders been appropriately apprised of information, they claim, they would not have invested in the company and are thus seeking to be compensated for damages resulting from Chipotle's recent downturn.

Chipotle store

Last week, a Chipotle location in Virginia was forced to close its doors after customers became ill, and the Virginia Health Department confirmed an outbreak of norovirus. And shortly after, customers in Dallas documented an incident wherein rats or mice allegedly fell from the ceiling of a Chipotle.

Despite bad press, though, some are looking at Chipotle’s depressed stock prices as an opportunity to invest in a sound business model. Yahoo! Finance’s Kyle Woodley recommended buying the stock in an article published last Friday, citing recent managerial streamlining, a willingness to expand, and a fresh-focused business model that jibes with food trends.

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