February 5, 2023

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SEC charges McDonald’s ex-CEO Steve Easterbrook

Since then, legal battles have played out on several fronts. In late 2021, Easterbrook agreed to pay back $105 million to settle the lawsuit with his former employer, an amount that represented the compensation he would have forfeited had he been upfront about his actions. One lawsuit, in which some investors are fighting for more payback, is ongoing.

The SEC’s order, announced today, charges McDonald’s for its shortcomings in its public disclosures related to Easterbrook’s separation agreement. 

McDonald’s and Easterbrook have not admitted or denied the SEC’s findings, but both have consented to its cease-and-desist order. For Easterbrook, that means being barred from being a corporate officer director for five years and a $400,000 civil penalty. McDonald’s was not given a financial penalty because it cooperated with the SEC’s investigation.

McDonald’s said in a statement that the lack of financial penalty acknowledges the work it has done to recover value for shareholders.

The SEC’s order said Easterbrook “knew or was reckless in not knowing” that failing to disclose additional company policy violations would influence McDonald’s disclosures to investors. Easterbrook’s behavior violated certain anti-fraud provisions, the news release said.

“When corporate officers corrupt internal processes to manage their personal reputations or line their own pockets, they breach their fundamental duties to shareholders,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement. “By allegedly concealing the extent of his misconduct during the company’s internal investigation, Easterbrook broke that trust with – and ultimately misled – shareholders.”

Lawyers for Easterbrook didn’t immediately respond to Bloomberg’s emailed request for comment. 

Bloomberg contributed.


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