SEC Fines Company For Understating Covid Hit
December 17, 2020
The SEC has levied a $125,000 penalty against Cheesecake Factory Inc. for understating the effects of the COVID-19 pandemic on its business. Specifically, the company was said to have made false and misleading statements in 8-K filings in March and April of this year. The SEC noted that the company, for example, maintained it was operating “sustainably” while losing around $6 million per week and with 16 weeks of cash remaining. The SEC order also notes that during the time period in question the company was informing landlords it couldn’t pay the rent, cutting executive pay, and putting approximately 41,000 employees on furlough. California-based Cheesecake Factory had revenues of more than $2 billion in 2019 and has for several years running been named one of Fortune’s “100 Best Companies to Work For.” SEC Chairman Jay Clayton issued a statement suggesting the agency was currently on the lookout for corporate filings that failed to acknowledge the pandemic’s effect on company operations.
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