February 03, 2006
The SEC May Want A Bite
In August 2005, Michael Snyder, the chief executive of Red Robin Gourmet Burgers Inc., resigned after an internal investigation concluded that he misused charter airplanes and corporate expense accounts. Snyder repaid $1.25 million to cover the disputed expenses. Now, according to the Rocky Mountain News, the SEC has opened a formal investigation into the matter. Red Robin shares fell as much as 9.8 percent on the news of the investigation and on last month’s announcement that the company would miss its fourth quarter earnings by 20% and that sales growth was lower than previously announced.
Also, according to the article, Red Robin is the subject of a wage and hour class-action lawsuit in California. Red Robin said it has "meritorious defenses" against the allegations and intends to "vigorously" defend itself.