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Grillin’ in the C-Suite at Chipotle; second subpoena served up

Chicken isn’t the only thing on the grill at Chipotle.

Less than 24 hours after telling investors about their bright future, Chipotle Mexican Grill executives revealed that they have received another federal Grand Jury subpoena related to “company-wide food safety matters dating back to Jan. 1, 2013.

Chipotle founder and co-CEO Steve Ells

Chipotle founder Steve Ells posted this photo of himself when he announced new food safety measures for the burrito chain.

Federal officers served the most recent subpoena on July 19 as the Denver-based fast food chain was in the midst of damage control for a norovirus outbreak among customers in Virginia. It is described by Chipotle officials as a “follow-up” to a subpoena they received on Jan. 28.

The big reveal today came about mid-way through a 19-page filing with the Securities and Exchange Commission (SEC), which includes information about Chipotle’s second quarter performance that CEO Steve Ells discussed Tuesday during a conference call.

The SEC filing describes the federal government’s criminal investigation into Chipotle’s operations in 153 words:

“On January 28, 2016, we were served with a Federal Grand Jury Subpoena from the U.S. District Court for the Central District of California in connection with an official criminal investigation being conducted by the U.S. Attorney’s Office for the Central District of California, in conjunction with the U.S. Food and Drug Administration’s Office of Criminal Investigations.  The subpoena requires the production of documents and information related to company-wide food safety matters dating back to January 1, 2013.  We received a follow-up subpoena on July 19, 2017 requesting information related to illness incidents associated with a single Chipotle restaurant in Sterling, Virginia. We intend to continue to fully cooperate in the investigation.  It is not possible at this time to determine whether we will incur, or to reasonably estimate the amount of, any fines or penalties in connection with the investigation pursuant to which the subpoena was issued.”

A slight rebound of Chipotle’s stock value that came with Tuesday’s conference call was wiped off the board as of mid-day today, with the per share around $342 — compared to its all-time high of $757.77 in August 2015, before the news of a series of foodborne outbreaks linked to the chain’s restraints nationwide.

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