Securities Industry Commentator by Bill Singer Esq

Man dies from coronavirus after calling it a 'political ploy' (New York Post)

Major Exporters Pledge to Avoid Disrupting Global Food Supplies (Bloomberg by Bryce Baschuk)

Chipotle Mexican Grill Agrees to Pay $25 Million Fine and Enter a Deferred Prosecution Agreement to Resolve Charges Related to Foodborne Illness Outbreaks / California-Based Company Agrees to Pay Largest-Ever Fine in a Food-Safety Case and Implement a Comprehensive Food Safety Compliance Program (DOJ Release)

March home sales drop 8.5% as sellers take properties off the market - and the coming months look worse (CNBC by Diana Olick)

Commodity Futures Trading Commission Chair Heath Tarbert On Oil Futures' Plummet (CNBC Video)

Emerging Market Investments Entail Significant Disclosure, Financial Reporting and Other Risks; Remedies are Limited (SEC Release)

Guest Blog: Riddle of the FINRA Sphinx by Stephen Kohn (BrokeAndBroker.com Blog)

SEC Charges Central Florida Resident for Fraud Targeting Retail Investors (SEC Release)

In the Matter [of] Claims for Award by [Redacted] ("Claimant 1") and [Redacted] ("Claimant 2") In Connection With Notice of Covered Action No. [Redacted] (CFTC Whistleblower Award)

According to the factual statement in the DPA, which the company agreed was true, Chipotle was implicated in at least five foodborne illness outbreaks between 2015 and 2018 connected to restaurants in the Los Angeles area, Boston, Virginia, and Ohio.  These incidents primarily stemmed from store-level employees' failure to follow company food safety protocols at company-owned restaurants, including a Chipotle policy requiring the exclusion of employees who were sick or recently had been sick.

For example, in August 2015, 234 consumers and employees of a Chipotle restaurant in Simi Valley, California reported becoming ill.  Although company policies required the restaurant to report certain employee illnesses to Chipotle safety officials and to implement enhanced food safety procedures, the restaurant did not pass along information regarding an ill employee until multiple consumers already had reported being sick.

In December 2015, a norovirus incident at a Chipotle restaurant in Boston sickened 141 people.  According to the DPA, that outbreak likely was the result of an ill apprentice manager who was ordered to continue working in violation of company policy after vomiting in the restaurant.  Two days later, the same employee helped package a catering order for a Boston College basketball team, whose members were among the consumers sickened by the outbreak.

In July 2018, approximately 647 people who dined at a Chipotle restaurant in Powell, Ohio reported illness related to Clostridium perfringens, a pathogen that grows rapidly when food is not held at appropriate temperatures.  The local health department found critical violations of local food regulations, including those specific to time and temperature controls for lettuce and beans.

As set out in the DPA, some store-level Chipotle employees from the 2015 to 2018 time period reported inadequate staffing and food safety training.  Employees also reported pressure to work while sick, even though that was against Chipotle's sick-exclusion policies.

Regionally, sales fell across the nation but hardest in the West, down 13.6% month-to-month. Sales fell 9.1% in the South, 7.1% in the Northeast and 3.1% in the South. 

The supply of homes for sale fell a sharp 10.2% annually. Toward the end of the month, some sellers de-listed their properties, not wanting potential buyers touring their homes in person. Other measures showed a sharp drop in the number of new listings in March, reflecting fear in the market among both buyers and sellers.

Over the past several decades, the portfolios of U.S. investors have become increasingly exposed to companies that are based in emerging markets or that otherwise have significant operations in emerging markets. This exposure includes investments in both U.S. issuers and foreign private issuers ("FPIs") that are based in emerging markets or have significant operations in emerging markets. During this time, China has grown to be the largest emerging market economy and the world's second largest economy.

The SEC's mission is threefold: protect our investors, preserve market integrity and facilitate capital formation. Ensuring that investors and other market participants have access to high-quality, reliable disclosure, including financial reporting, is at the core of our efforts to promote each of those objectives. This commitment to high-quality disclosure standards-including meaningful, principled oversight and enforcement-has long been a focus of the SEC and, since its inception, the PCAOB.

Our ability to promote and enforce these standards in emerging markets is limited and is significantly dependent on the actions of local authorities-which, in turn, are constrained by national policy considerations in those countries. As a result, in many emerging markets, including China, there is substantially greater risk that disclosures will be incomplete or misleading and, in the event of investor harm, substantially less access to recourse, in comparison to U.S. domestic companies. This significant asymmetry holds true even though disclosures, price quotes and other investor-oriented information often are presented in substantially the same form as for U.S. domestic companies. Immediately below, we summarize some of these risks and related considerations specific to issuers, auditors, index providers and financial professionals. In the body of this statement, these matters are discussed in more detail. . . .

[F]rom 2015 to 2019, Brickner falsely represented to investors that he would use their money to purchase a Colorado-licensed marijuana dispensary network and conduct an IPO or merge with an over-the-counter public company, generating significant profits for investors. However, according to the SEC's complaint, Brickner misappropriated approximately $3 million of investor money to fund his lavish lifestyle and for personal expenses, including $1.2 million to purchase classic and luxury cars, and $335,000 in expenses at an adult entertainment club. The SEC also alleges that Brickner misrepresented to investors his experience as a successful entrepreneur while failing to disclose he had filed for bankruptcy in 2016, and made baseless claims to investors about a purportedly "imminent" merger.

• Securities Industry Commentator
• Bill Singer