MTY CLAIMS IT’S IN THE RESTAURANT BUSINESS, BUT IT DERIVED 82% OF ITS 2020 EARNINGS FROM KICKBACKS. MTY IS IN THE KICKBACK BUSINESS.

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KICKBACKS ARE A PART OF AN ELABORATE SCHEME THAT HAS ADDED $214 MILLION TO THE WEALTH OF CHAIRMAN STANLEY MA.

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Potential Regulatory & Criminal Violations Timeline

Updated February 9, 2022

The following is a timeline of events related to numerous potential FTC and criminal violations reported to MTY Food Group and Cold Stone Creamery.

November 16, 2021 – MTY announced the unexpected resignation of board member Gary O’Connor. O’Connor was MTY’s audit chairman at the time of the whistleblower allegations and played a principal role in MTY’s cover-up by falsely claiming the allegations were made by an active employee and claiming they were not true.

October 8, 2021 – During the announcement of its Q4, 2019 results on February 24, 2020, MTY CEO Eric Lefebvre and former Audit Chairman Gary O’Connor falsely declared the whistleblower allegations were baseless. During an investor conference later that day, Lefebvre made more false statements to make it appear that MTY’s flagship brand, Cold Stone, was growing. (The March 9, 2020 Forbes article below implied Lefebvre’s statements were false.) Also on the same day, Lefebvre committed to resolving MTY’s worsening profitability issue without admitting the problem existed.

On October 8, 2021, MTY held its Q3, 2021 investor conference during which MTY CEO Eric Lefebvre admitted to various issues raised in the whistleblower allegations that he and O’Connor claimed were baseless. Nearly two years after he committed to address the company’s closure and franchisee profitability issues, Lefebvre admitted that both rage on. He also admitted its franchisees are struggling and that getting “franchisees to renew is certainly a challenge” due to the franchisee profitability issues. In addition, Lefebvre contradicted his earlier claim that Cold Stone was growing and would always grow and admitted its flagship brand has suffered “network erosion in the past few years with some stores closing”, though the brand has not grown positively since 2007.

April 12, 2021 – MTY admits it considers Chairman Stanley Ma its “most important shareholder”. Ma had a long history of selling no shares. After allowing MTY to falsify reports, dispatching board members CEO Eric Lefebvre and former Audit Chairman, Gary O’Connor to make false statements during an investor conference, and covering up whistleblower allegations, Stanley Ma announced he was selling $43 million in stock. Stanley Ma was trading overpriced stock knowing the whistleblower allegations his company had previously denied were actually true. Stanley Ma has engaged in an elaborate scheme that inflated MTY’s stock value and added $214M to his already substantial wealth during the pandemic alone.

MTY failed to issue a material impact statement to correct Lefebvre and O’Connor’s earlier false statements during the investor conference. Investors should, therefore, consider similarities based on the information above with former Enron CEO Jeffrey Skilling’s false and misleading statements during an investor conference, his subsequent $63M trades and other factors leading to his arrest and conviction on insider trading violations.

March 19, 2021 – MTY announced the unexpected resignation of board member David K. Wong. Wong’s resignation occurred only a few weeks before Chairman Stanley Ma’s inside trade discussed above. Investors should consider that Wong’s resignation may have been triggered by his disagreement with Stanley Ma’s announcement to the board of Ma’s intentions to trade $43M in stock without MTY issuing a material impact statement for its earlier false statements during the investor conference.

February 15, 2021 – We first published the cover-up article on February 15, 2021 proving Lefebvre, O’Connor and MTY/Cold Stone had made false statements and the whistleblower allegations were true.

October 22, 2020 – MTY board member Dickie Orr traded 4,000 shares of the company’s stock. Prior to that, Stanley Ma had led MTY to engage in an elaborate scheme to cover up the whistleblower allegation and artificially inflate MTY’s stock value. (This added $214M to Ma’s already substantial wealth during the pandemic alone.) As a result, we believe Orr’s trade was made based on inside information.

August 24, 2020 – MTY board member and CEO Eric Lefebvre traded 2,000 shares of the company’s stock. Prior to that, Stanley Ma had led MTY to engage in an elaborate scheme to cover up the whistleblower allegation and artificially inflate MTY’s stock value. (This added $214M to Ma’s already substantial wealth during the pandemic alone.) As a result, we believe Lefebvre’s trade was made based on inside information.

March 26, 2020 – Cold Stone published its 2020 FDD. The document maintained numerous whistleblower allegation changes. In addition, Cold Stone claims its total international locations grew by 5 from 341 stores to 346 stores during 2020 despite that entire Singapore market closed. We believe this data is false and a cover-up attempt.

March 27, 2020 – Cold Stone published its 2020 FDD. The document included numerous whistleblower allegation changes. In addition, Cold Stone claims its total international locations grew by 13 to 341 stores during 2019.

February 13, 2020 – March 18, 2020 – MTY’s stock fell from $59.73 on February 13, 2020—the day before the company announced the whistleblower allegations—to a low of $16.58 on March 18, 2020. Shareholders lost nearly $1.1B in value.

March 9, 2020 – Forbes published a second article questioning the truthfulness of MTY, Lefebvre and O’Connor’s statements made to investors regarding the allegations.

February 24, 2020 – Following MTY, Lefebvre and or O’Connor’s statements that the whistleblower allegations were “baseless”, “dealt with” and that Cold Stone would always grow, MTY’s stock soared 9% in trading on the good news. This was despite that Restaurant Brands International Inc., MTY’s nearest competitor, and the market were -1.6% and -2.0%, respectively, and analysts were underwhelmed with MTY’s financial performance. Therefore, it appears that securities investors were relying on the statements of MTY, Lefebvre and or O’Connor that all is well.

February 24, 2020 – Prior to the market opening but following the press release above, MTY held its investor conference. During the conference, CEO Eric Lefebvre reiterated O’Connor’s statements above. In addition, following one analysts’ question regarding pace of Cold Stone’s closures, Lefebvre stated, “[O]bviously, there’s always going to be more store openings than more store closures for Cold Stone just because it’s such a big brand…. [T]hings are going to go well” (“Lefebvre’s Statement” or “Statement”).

February 24, 2020 – Prior to the market opening, MTY issued a press release quoting Gary O’Connor, Chairman of the Audit Committee, claiming the board of directors had investigated the whistleblower allegations and determined, among other things:

  1. They were made by an “active employee”.
  2. They were found to be “baseless”.
  3. They were previously “evaluated and dealt with”.
  4. The company cannot give further details about the allegations.

February 23, 2020 – On Sunday afternoon, MTY announced it would issue its Q4, 2019 results at 6:00AM EST the following morning and hold its postponed investor conference at 8:30AM EST the same day.

February 14, 2020 – One day after the attorney communication above, MTY issued a press release announcing the allegations by a “whistleblower employee”. The announcement was followed by numerous negative media publications. The stock also “tumbled as much as 13%, its biggest intraday decline [at the time] since October 2005”. In addition, one investment community expressed concerns and criticized the lack of transparency by MTY.

February 13, 2020 – A U.S. attorney speaking on behalf of MTY responded and acknowledged receipt and review of the whistleblower allegations. The attorney also warned of potential legal consequences if we published the allegations.

January 2020 – An attorney, acting on our behalf, reported numerous potential U.S. Federal Trade Commission (FTC) violations to MTY.

MTY Food Group Executives & Other Photos