McDonald’s ex-CEO charged with misrepresentations to investors
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McDonald’s fired Mr Stephen Easterbrook in November 2019.
PHOTO: AFP
NEW YORK – The United States Securities and Exchange Commission (SEC) on Monday charged former McDonald’s chief executive Stephen Easterbrook with making false and misleading statements to investors about the circumstances of his 2019 termination.
The SEC hit Mr Easterbrook with a five-year officer and director bar and a US$400,000 (S$533,000) civil penalty.
McDonald’s fired Mr Easterbrook in November 2019 for exercising “poor judgment” by engaging in a relationship with a company employee, the SEC said.
But Mr Easterbrook failed to disclose other additional violations of company policy that he committed by engaging in undisclosed relationships with other employees of the fast-food giant, it said.
“When corporate officers corrupt internal processes to manage their personal reputations or line their own pockets, they breach their fundamental duties to shareholders,” SEC enforcement director Gurbir Grewal said in a statement.
The agency also charged McDonald’s with “shortcomings” in its public disclosures related to Mr Easterbrook’s ouster, but did not impose any fines on the firm due to its “substantial cooperation” with the investigation, the SEC said.
Attorneys for Mr Easterbrook, who consented to the order but did not admit or deny the SEC’s findings, did not respond to calls for comment.
McDonald’s said in a statement that the settlement reinforced the fact that it held Mr Easterbrook “accountable for his misconduct”.
In 2021, Mr Easterbrook returned more than US$105 million he received as a severance package in 2019 and apologised to the company to settle a lawsuit over the alleged cover-up.
“We fired him, and then sued him upon learning that he lied about his behaviour,” McDonald’s said in its statement on Monday.
Republican SEC commissioners Hester Peirce and Mark Uyeda dissented against the charges against McDonald’s, saying the order turns the “victim of Mr Easterbrook’s deception” into a securities law violator.
The dissenting commissioners said they have concerns that the case will create a “slippery slope” that expands public companies’ disclosure requirements. REUTERS
