When The Cheesecake Factory told investors in March that it was "operating sustainably," it was actually forecasting just 16 weeks of cash remaining and telling landlords its couldn't pay rent, according to the Securities and Exchange Commission.
Because of the omissions, the chain agreed to pay a $125,000 federal fine, the SEC said Friday, in the first regulatory action against a company over claims of illegal actions during the pandemic. The Cheesecake Factory agreed to the fine without admitting to the charges.
Despite withholding the fact it was losing $6 million per week from the public, the company - which operates nearly 300 restaurants throughout the US and Canada - told other potential private equity investors about the situation as it looked for more liquidity to pad its balance sheets, the SEC said.
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