It has been reported that the U.S. Securities and Exchange Commission (SEC) is investigating the popular and well-known food chain, Chipotle Mexican Grill. Chipotle is by far the highest-profile entity pursued as part of the federal immigration strategy’s increased focus on employers hiring undocumented workers. Since January 2009, greater than 7,500 employers suspected of hiring undocumented workers have been audited and approximately $100 million in administrative and criminal fines have been handed down.
Earlier this week, Chipotle received a subpoena from the SEC asking for documentation detailing compliance with employee work authorization requirements, related public statements and other disclosures. This probe was initiated after Chipotle drew the attention of Immigrations and Customs Enforcement (ICE), and failed an audit of its establishments in Virginia, Washington, DC, and Minnesota. Chipotle lost over half of its workers in Minnesota after the failed ICE audit in 2010, and even more workers were lost after subsequent ICE audits in Washington, DC and Virginia.
The U.S. Attorney’s Office in the District of Columbia is leading the inquiry into disclosures regarding work authorization compliance in investor communication materials and required SEC filings.
SEC Rules: Disclosures
According to the SEC, the laws and rules that govern the securities industry in the United States derive from a simple and straightforward concept: all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it. To achieve this, the SEC requires public companies to disclose meaningful financial and other information to the public. This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security. Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions.
Conduct That May Lead to SEC Investigation
• The misrepresentation or omission of important information about securities
• Manipulating the market prices of securities
• Stealing customers’ funds or securities
• Violating broker-dealers’ responsibility to treat customers fairly
• Insider trading (violating a trust relationship by trading while in possession of material, non-public information about a security)
• The sale of unregistered securities
SEC Violation Attorneys in Virginia
The white collar criminal defense law firm of Price Benowitz, LLP works to achieve the best possible outcome for its clients facing Securities and Exchange Commission scrutiny. If you are under federal investigation, you are advised to seek skilled legal guidance as soon as possible. Federal investigations involving the SEC, ICE, and IRS can be aggressive, with evidence procured from a wide variety of sources. The white collar attorneys at Price Benowitz, LLP are highly experienced at providing a strong defense against government investigations, including fraud charges and white collar crimes, particularly those under the scope of the SEC.
Written by Phil Balbo, staff writer for Price Benowitz LLP. You can read more about the case at the Wall Street Journal. For more information about these types of cases or for free consultation about a similar case, please visit the White Collar attorneys with Price Benowitz LLP.
PhilBalbo
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