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Chipotle Mexican Grill Receives Lawsuit For Misleading Investors About E.Coli Outbreak

Update Date: Jan 11, 2016 01:02 PM EST

Chipotle Mexican Grill can't seem to get enough of all the headaches it got in recent months since the E. Coli food scandal broke out in August last year. As the embattled burrito maker tries to weather the crisis, a legal storm is undermining the company's latest efforts to recover.

Just recently, investors cried foul over the restaurant chain's alleged attempts to mislead investors regarding its food safety and quality controls.

In a civil complaint filed in a New York District Court, the investors accused the company for deliberately failing to advise investors regarding its inadequate quality controls that harmed both consumers and employees.

The class action lawsuit spearheaded by Chipotle investor Susie Ong stated that the company made "materially false and misleading statements" and failed to truthfully inform investors that "quality controls were not in compliance with applicable consumer and workplace safety regulations" as quoted in article published by Fortune.

The alleged irresponsible corporate behavior resulted to a continuing downspiral as Chipotle stock takes severe beating and sales keep contracting.

The lawsuit aims to compensate investors who bought the company shares from February 2015 to January 2016.

Apart from the investor-led lawsuit, the company is currently facing a number of individual complaints from people sickened by E.Coli.

According to Reuters, Chipotle stocks suffers a 35% drop since October and 30% fall in restaurant sales in December. The food company used to be a Wall Street darling until the food-borne virus outbreaks came along.

So far, the burrito chain refused to comment on the issue.

In another note, Chipotle announced last December that it altered its food preparation methods in a bid to win back public trust.

"We have taken aggressive actions to implement pioneering food safety practices," the company's official statement said as quoted by BBC News.

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