Notice to Attorneys:
This website seeks relationships with law firms having expertise in Canadian securities and franchising law as well as U.S. securities law. The purpose is to provide guidance to us in drafting regulatory complaints on these subjects within the stated jurisdictions. If you have such expertise and would like to assist, please contact us. ~ Thank you!
Warning to MTY Investors
Updated September 25, 2020
- MTY, CEO Eric Lefebvre and or Gary O’Connor, Chairman of the Audit Committee, repeatedly told investors the whistleblower allegations were reported by an “active employee” (here, here and here). The timeline leading up to the whistleblower announcement suggests this website is the whistleblower and their statements were knowingly false and or intended to mislead investors.
- They also repeatedly told investors the allegations were “baseless”, “evaluated” and “dealt with in the past” (here and here). The company’s changes to the disclosures, the timeline and the lack of a retraction, again, suggest the statements were knowingly false and or intended to mislead investors.
- Lefebvre told investors Cold Stone would “always” grow. The previously mentioned documents suggest this statement too was knowingly false and or intended to mislead investors.
- Hundreds of statements reported to MTY made in the promotion of its franchise investments were knowingly false and or intended to mislead investors.
Following the whistleblower announcement, MTY trended negatively and lost $1.1B in shareholder value—plummeting from $59.73 to $16.58 on March 18th. The company has struggled to recover ever since. In our opinion, MTY has done all it can to hide behind COVID. However, we estimate that perhaps more than half of this lost value is due to MTY, Lefebvre or O’Connor’s false statements and the company’s mishandling of the whistleblower allegations.
MTY, Lefebvre and O’Connor have failed to retract their statements and warn investors of potential material impacts related to the whistleblower allegations. We believe this is to avoid embarrassment, additional negative publicity and mostly to protect the company and or board from potential financial liability from shareholder litigation and regulatory action.
Investors should discuss the recovery of their financial losses after February 14, 2020 with their attorney. We are happy to assist legal counsel in separating the whistleblower allegation damages from those related to COVID and in the evidence gathering process.
Finally, we’ll post an open letter to investors shortly summarizing all topics. We’ll provide greater details regarding MTY’s claim that Cold Stone—it’s perennial sales leader—purportedly grew internationally to 341 locations as stated in the federal disclosures. We’ve received evidence that the concept suffered a double-digit decline and had far fewer than 341 locations. In addition, we’ll discuss how these claims may be intended to cover up Lefebvre’s false statements about Cold Stone’s closure rate possibly to protect the company from $100’s of millions in investors claims for losses after the whistleblower announcement. In our opinion, this is evidence that MTY knowingly and intentionally mislead investors for the financial benefit of the company and its board of directors.
We intend to publish a summary of our findings and the evidence to a business news journal following the open letter.
For the benefit of investors who would like to pursue damages from MTY without bearing legal costs, we also intend to provide contact information for a law firm that investors may contact for such legal assistance.
Until then, attorneys representing investors should feel free to contact us.