Save it for the doggy bag... Cheesecake Factory is the first company to serve plates as large as Manhattan studio apartments. It's also the first company to be charged by the SEC for misleading investors about the pandemic’s financial impact. Regulators think Cheesecake failed to bake some key info into its March and April financial filings.
- Cheesecake said it was "operating sustainably" during lockdowns, while internal docs showed it was burning through $6M per week (with just four months of cash left).
- It also failed to mention that it had told landlords it would be skipping on April rent — for once, it left something off the plate.
Could surf on that chicken parm... Cheesecake ended up getting financially saved by a $200M investment later in April, but it wasn't spared from regulatory consequences: it settled with the SEC for $125K and agreed to stop leaving things out.
The SEC makes the stock market possible... It holds public companies accountable for misleading investors — or even straight up lying (cough, Luckin Coffee). It was created to prevent everything from insider trading and accounting fraud, to this Cheesecake situation. If we didn't feel confident that financial reports were true, we probably wouldn't invest at all. And if we didn't invest, trillions of idle dollars would be laying around collecting dust – instead of fueling the economy.