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Warning to MTY Investors
Updated October 13, 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). These statements were knowingly false and or intended to mislead investors. The timeline leading up to the whistleblower announcement indicates this website is the whistleblower.
- They also repeatedly told investors the allegations were “baseless”, “evaluated” and “dealt with in the past” (here and here). These statements were knowingly false and or intended to mislead investors. The company’s changes to its federal disclosures and the lack of a retraction, again, suggest the whistleblower allegations were true.
- Lefebvre told investors Cold Stone would “always” grow. The federal disclosures and the previously mentioned documents prove this statement was also knowingly false and or intended to mislead investors.
- Hundreds of additional 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 damage to investors who relied on MTY’s false statements and loss money during its decline may be complete—even if the stock fully recovers in the future. 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.
It appears 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 who suffered losses following MTY’s February 14, 2020 whistleblower announcement should ask their attorney if MTY is liable due to the company’s repeated false statements to investors. We are happy to assist legal counsel in the evidence gathering process and in distinguishing damages due to the whistleblower allegations compared to COVID.
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 investor 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.
Finally, we intend to publish a summary of our findings and the evidence to a business news journal following the public of 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.