Fat Brands Misled About Probes Before Selloff, Suit Says (1)

Restaurant franchisor Fat Brands Inc. falsely said in public filings that it was cooperating with the SEC and federal prosecutors before the stock’s worst selloff on record, and it underestimated its liability for about $47 million in improper loans to its founder, an investor alleges.

The common stock of the Fatburger, Johnny Rockets, and Twin Peaks owner lost 28% of its value May 10, when the government charged the company and two executives with fraud.That was the stock’s biggest loss since its 2017 market debut, according to data compiled by Bloomberg. Shareholder Mitchell Kates filed the proposed class action June ...