The Securities and Exchange Commission (SEC) charged former McDonald’s Corp CEO Stephen Easterbrook on Monday with making false and misleading statements to investors about the circumstances of his termination in 2019.
The SEC imposed a five-year officer and director bar and a $400,000 civil penalty on Easterbrook.
According to the SEC, Easterbrook was fired in November 2019 for “poor judgment” in engaging in a relationship with a McDonald’s employee.
However, Easterbrook failed to disclose other violations of company policy he committed by engaging in undisclosed relationships with other fast-food employees, according to the complaint.
“When corporate officers corrupt internal processes to manage their personal reputations or line their own pockets, they violate their fundamental duties to shareholders,” said Gurbir Grewal, the SEC’s enforcement director.
The SEC also charged McDonald’s with “shortcomings” in its public disclosures related to Easterbrook’s dismissal, but did not levy any fines due to the company’s “substantial cooperation” with the investigation.
Easterbrook’s attorneys, who consented to the order but did not admit or deny the SEC’s findings, did not immediately respond to requests for comment. In a statement, McDonald’s stated that the settlement reinforced the fact that it held Easterbrook “accountable for his misconduct.”
To settle a lawsuit over the alleged cover-up, Easterbrook returned over $105 million he received as a severance package in 2019 and apologized to the company in 2021.
“We fired him and then sued him after discovering he lied about his behavior,” the company said in a statement on Monday.
Republican SEC commissioners Hester Peirce and Mark Uyeda opposed the charges against McDonald’s, claiming that the order turns the “victim of Mr. Easterbrook’s deception” into a securities law violator.
The dissenting commissioners expressed concern that the case will create a “slippery slope” that expands the disclosure requirements for public companies.