Original Story: latimes.com
Chipotle Mexican Grill Inc. said Wednesday that it was served with a federal grand jury subpoena in connection with a criminal investigation tied to a norovirus incident at a Simi Valley restaurant.
In a filing with the Securities and Exchange Commission, the Denver restaurant chain said the subpoena, which was served in December, requires it to produce a “broad range of documents” related to the Chipotle restaurant in Simi Valley that experienced the “isolated” incident in August. A Denver criminal defense attorney is reviewing the details of this case.
The investigation is being conducted by the U.S. attorney's office for the Central District of California in conjunction with the Food and Drug Administration's office of criminal investigations.
Chipotle spokesman Chris Arnold said in an email that the company does not discuss pending legal actions as a matter of policy, but that it would cooperate fully in the investigation.
Criminal inquiries related to food safety outbreaks are uncommon, but there has been increased attention on these issues and companies' responses to them, especially after the FDA Food Safety Modernization Act was signed into law in 2011. The measure focuses on preventing contamination.
“We're sort of in new territory here,” said Michael Roberts, executive director of the Resnick Program for Food Law and Policy at UCLA. “I think we're seeing a new partnership between the FDA and prosecutors.” A Des Moines criminal lawyer is following this story closely.
In 2014, a federal jury convicted former Peanut Corp. of America owner Stewart Parnell of knowingly shipping peanut butter contaminated with salmonella and covering up the evidence. Parnell was sentenced to 28 years in prison for his role in a 2009 salmonella outbreak that was blamed for nine deaths and linked to the company's plant.
“The FDA ... sent a clear signal that it's going to use its criminal sections to focus on these food safety outbreaks,” Roberts said of the Peanut Corp. case. “It's not so much the outbreak itself, it's the response.”
Chipotle's sales have been rocked by E. coli outbreaks linked to Chipotle restaurants in several states. In November, the chain temporarily closed 43 restaurants in Washington and Oregon after 22 cases were initially linked to some of its eateries. Those restaurants have since reopened.
A month later, 141 Boston College students were reported to have contracted norovirus from eating at a Chipotle restaurant in Brighton, Mass. This separate outbreak was specifically mentioned in the company's Wednesday SEC filing as worsening the “adverse financial and operating impacts” from the E. coli outbreak in October and November. A San Diego securities lawyer is experienced in securities fraud claims and SEC enforcement.
As of December, 53 people in nine states, including California, have been affected by one norovirus strain, and five people in three states were hit by another, according to the FDA.
Chipotle's December sales were down 30% from a year earlier, according to the SEC filing.
On Wednesday, shares of Chipotle sank $22.36, or nearly 5%, to $426.67.
Historically, Roberts said, companies have been able to rebound from food safety problems. Chains such as Jack in the Box and Taco Bell recovered from E. coli outbreaks related to food sold at their stores in the quarters and years after the event, according to an investors' note from Credit Suisse analyst Jason West.
“It's a different age where I think consumers are more sensitive to these issues or looking at them more closely,” Roberts said. “There's a growing societal interest in food.”
Showing posts with label Criminal Investigation. Show all posts
Showing posts with label Criminal Investigation. Show all posts
Thursday, January 7, 2016
Thursday, September 17, 2015
GM TO PAY $900M TO RESOLVE IGNITION SWITCH PROBE
Original Story: detroitnews.com
Washington — Federal prosecutors are expected to announce Thursday that General Motors Co. will pay a $900 million fine as part of a criminal investigation into GM’s delayed recall into defective ignition switches in 2.6 million cars, The Detroit News has learned. A Charleston defective products lawyer is reviewing the details of this case.
GM is expected to be charged with at least two felonies, including wire fraud, for misleading consumers and hiding information from the National Highway Traffic Safety Administration, three people briefed on the settlement said. It also will enter into a deferred prosecution agreement with the U.S. Attorney’s Office in New York over the defect that was linked to 124 deaths, as well as face oversight from an independent monitor. GM will not have to plead guilty as part of the agreement.
NHTSA declined to comment.
The defective ignition switch, mostly installed in Chevrolet Cobalts and Saturn Ions, allowed the key to inadvertently turn off the engine in some vehicles, which disabled power steering and air bags. GM CEO Mary Barra fired 15 employees and disciplined five others last year after an internal investigation showed the automaker largely ignored the problem for a decade. An Irvine product liability lawyer represents clients who have been injured as a direct result of the use or contact with a defective or dangerous product.
The $900 million fine is less than the $1.2 billion that Toyota Motor Corp. paid last year after it was charged with wire fraud — because federal prosecutors credited the Detroit automaker with swift and significant cooperation. The government is not expected to announce any criminal prosecutions of individuals, but prosecutors are expected to say the investigation remains open.
The Wall Street Journal reported some details of the settlement earlier.
A spokeswoman for U.S. Attorney Preet Bharara in New York declined to comment, as did GM, which reiterated it is cooperating fully with the investigation. A formal announcement is expected Thursday in New York. Resolving the probe represents a major milestone for Barra, who took over shortly before the scandal exploded last year. A Jackson product liability lawyer is following this story closely.
The settlement comes after GM set aside $4.2 billion last year to pay for recall and ignition compensation fund expenses and transformed how it approached safety issues. Barra repeatedly appeared before Congress to address the ignition problems and the automaker came under withering criticism for its approach to safety. Barra blamed a “culture of incompetence and neglect” and pledged never to forget what happened.
Peter J. Henning, a Wayne State University law professor, said the fact that GM cooperated may be why its fine comes in less than Toyota’s. He expects the Justice Department will say it continues to investigate individuals related to the case and that the continuing investigation doesn’t preclude charging individuals.
“GM reacted,” he said. “Once it became known to senior management, they took steps to address it not only with victims, but also with the government. They were much more forthcoming and essentially it created a template on how to cooperate.”
Laura Christian of Harwood, Maryland is the birth mother of Amber Marie Rose, a 16-year-old who was killed in a 2005 crash tied to the ignition switch defect. Christian said she will be greatly disappointed if GM is fined less than Toyota and if nobody from GM is criminally charged.
“This is one of the worst days since Amber died,” Christian said by phone Wednesday night, nearly in tears. “I was really hoping, really, really hoping that the Justice Department would hold GM accountable.”
In May 2014, GM agreed to pay a then record-setting $35 million civil penalty to the National Highway Traffic Safety Administration and make significant safety changes. In doing so, GM admitted it broke the law. It entered into a three-year consent agreement with NHTSA.
Transportation officials said some within GM knew ignition switch problems would turn off air bags in Cobalts as early as November 2009. NHTSA Acting Administrator David Friedman said he had no records indicating Barra knew of the defect, but said that GM engineers, investigators, lawyers and other executives knew of it and failed to act to protect consumers.
The Securities and Exchange Commission, Transport Canada and all 50 state attorneys general also have been investigating GM for nearly 18 months.
Federal prosecutors, aided by the FBI and a federal grand jury, have interviewed dozens of current and former GM executives, lawyers and engineers, including Barra. They also have talked to employees at auto supplier Delphi, which made the ignition switch.
A fund run by compensation expert Ken Feinberg approved compensation for nearly 10 times more than the 13 deaths GM executives reported as the controversy unfolded in 2014. The fund also approved claims for 17 serious injuries and 258 less-serious injuries.
GM is paying at least $1 million in each death claim and gave Feinberg and his staff the final decision on approving or rejecting all claims. It placed no cap on the amount Feinberg could award, but he is not allowed to assess “punitive damages.” A Nashville wrongful death lawyer represents clients in wrongful death cases and negligent accidents.
The automaker expects it will spend $625 million in compensation; it already has paid out $280 million in claims.
Joseph Spak, an analyst with RBC Capital Markets LLC, said in a note to investors Wednesday that the firm had been expecting a $1.5 billion settlement for GM with the Justice Department. If the fine comes in smaller, Spak said it would be a “slight positive” for GM and its stock.
Henning said the settlement with the DOJ came quickly for a case such as this.
“It lets GM put it behind it quickly, and that way it becomes exactly what GM wants, which is (to be) yesterday’s news,” he said.
GM also faces hundreds of lawsuits stemming from the faulty part, including 100 U.S. class-action lawsuits and 21 in Canada from owners who say the recalls reduced the value of their vehicles.
The automaker also faces 172 U.S. lawsuits and nine in Canada over injury or death claims; those are separate from the compensation claims. There are also suits pending by shareholders. A Detroit automotive lawyer represent clients in a variety of automotive law matters including product liability matters.
The first trial stemming from the dozens of suits filed against GM and consolidated in front of a federal judge in New York is set to start in January. Lawyers are deposing dozens of current and former GM executives, including Barra set for October.
Washington — Federal prosecutors are expected to announce Thursday that General Motors Co. will pay a $900 million fine as part of a criminal investigation into GM’s delayed recall into defective ignition switches in 2.6 million cars, The Detroit News has learned. A Charleston defective products lawyer is reviewing the details of this case.
GM is expected to be charged with at least two felonies, including wire fraud, for misleading consumers and hiding information from the National Highway Traffic Safety Administration, three people briefed on the settlement said. It also will enter into a deferred prosecution agreement with the U.S. Attorney’s Office in New York over the defect that was linked to 124 deaths, as well as face oversight from an independent monitor. GM will not have to plead guilty as part of the agreement.
NHTSA declined to comment.
The defective ignition switch, mostly installed in Chevrolet Cobalts and Saturn Ions, allowed the key to inadvertently turn off the engine in some vehicles, which disabled power steering and air bags. GM CEO Mary Barra fired 15 employees and disciplined five others last year after an internal investigation showed the automaker largely ignored the problem for a decade. An Irvine product liability lawyer represents clients who have been injured as a direct result of the use or contact with a defective or dangerous product.
The $900 million fine is less than the $1.2 billion that Toyota Motor Corp. paid last year after it was charged with wire fraud — because federal prosecutors credited the Detroit automaker with swift and significant cooperation. The government is not expected to announce any criminal prosecutions of individuals, but prosecutors are expected to say the investigation remains open.
The Wall Street Journal reported some details of the settlement earlier.
A spokeswoman for U.S. Attorney Preet Bharara in New York declined to comment, as did GM, which reiterated it is cooperating fully with the investigation. A formal announcement is expected Thursday in New York. Resolving the probe represents a major milestone for Barra, who took over shortly before the scandal exploded last year. A Jackson product liability lawyer is following this story closely.
The settlement comes after GM set aside $4.2 billion last year to pay for recall and ignition compensation fund expenses and transformed how it approached safety issues. Barra repeatedly appeared before Congress to address the ignition problems and the automaker came under withering criticism for its approach to safety. Barra blamed a “culture of incompetence and neglect” and pledged never to forget what happened.
Peter J. Henning, a Wayne State University law professor, said the fact that GM cooperated may be why its fine comes in less than Toyota’s. He expects the Justice Department will say it continues to investigate individuals related to the case and that the continuing investigation doesn’t preclude charging individuals.
“GM reacted,” he said. “Once it became known to senior management, they took steps to address it not only with victims, but also with the government. They were much more forthcoming and essentially it created a template on how to cooperate.”
Laura Christian of Harwood, Maryland is the birth mother of Amber Marie Rose, a 16-year-old who was killed in a 2005 crash tied to the ignition switch defect. Christian said she will be greatly disappointed if GM is fined less than Toyota and if nobody from GM is criminally charged.
“This is one of the worst days since Amber died,” Christian said by phone Wednesday night, nearly in tears. “I was really hoping, really, really hoping that the Justice Department would hold GM accountable.”
In May 2014, GM agreed to pay a then record-setting $35 million civil penalty to the National Highway Traffic Safety Administration and make significant safety changes. In doing so, GM admitted it broke the law. It entered into a three-year consent agreement with NHTSA.
Transportation officials said some within GM knew ignition switch problems would turn off air bags in Cobalts as early as November 2009. NHTSA Acting Administrator David Friedman said he had no records indicating Barra knew of the defect, but said that GM engineers, investigators, lawyers and other executives knew of it and failed to act to protect consumers.
The Securities and Exchange Commission, Transport Canada and all 50 state attorneys general also have been investigating GM for nearly 18 months.
Federal prosecutors, aided by the FBI and a federal grand jury, have interviewed dozens of current and former GM executives, lawyers and engineers, including Barra. They also have talked to employees at auto supplier Delphi, which made the ignition switch.
A fund run by compensation expert Ken Feinberg approved compensation for nearly 10 times more than the 13 deaths GM executives reported as the controversy unfolded in 2014. The fund also approved claims for 17 serious injuries and 258 less-serious injuries.
GM is paying at least $1 million in each death claim and gave Feinberg and his staff the final decision on approving or rejecting all claims. It placed no cap on the amount Feinberg could award, but he is not allowed to assess “punitive damages.” A Nashville wrongful death lawyer represents clients in wrongful death cases and negligent accidents.
The automaker expects it will spend $625 million in compensation; it already has paid out $280 million in claims.
Joseph Spak, an analyst with RBC Capital Markets LLC, said in a note to investors Wednesday that the firm had been expecting a $1.5 billion settlement for GM with the Justice Department. If the fine comes in smaller, Spak said it would be a “slight positive” for GM and its stock.
Henning said the settlement with the DOJ came quickly for a case such as this.
“It lets GM put it behind it quickly, and that way it becomes exactly what GM wants, which is (to be) yesterday’s news,” he said.
GM also faces hundreds of lawsuits stemming from the faulty part, including 100 U.S. class-action lawsuits and 21 in Canada from owners who say the recalls reduced the value of their vehicles.
The automaker also faces 172 U.S. lawsuits and nine in Canada over injury or death claims; those are separate from the compensation claims. There are also suits pending by shareholders. A Detroit automotive lawyer represent clients in a variety of automotive law matters including product liability matters.
The first trial stemming from the dozens of suits filed against GM and consolidated in front of a federal judge in New York is set to start in January. Lawyers are deposing dozens of current and former GM executives, including Barra set for October.
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