In May 2024, FAT Brands (a global franchising company which owns 18 restaurant brands including Johnny Rockets, Fazoli’s, Ponderosa, and Bonanza Steakhouses) as well as various current or former executives were civilly charged by the SEC and criminally charged by the DOJ. (See here for the prior post).
The matter was highlighted on these pages because it was example of a so-called non-FCPA, FCPA enforcement action (that is an action that charged violations of the FCPA’s books and records and internal controls provisions yet had nothing to do with alleged foreign bribery).
It is extremely rare for a publicly traded company to force the Department of Justice to prove a criminal case in court. The vast majority of issuers opt to resolve a matter through alternative resolution vehicles such as a non-prosecution agreement, deferred prosecution, etc.
It is also very rare for a publicly traded company to force the SEC to prove a civil case in court as the vast majority of issuers under scrutiny opt to resolve through an administrative order rather than force the SEC to prove its court in court.
Fat Brands and the individuals choose the path least traveled.
In July 2025, the DOJ moved to dismiss the indictment (which charged various tax offenses, wire fraud, and false statements). See here for the company’s press release.
Recently, the SEC moved to dismiss the action against all defendants and stated: “in the exercise of its discretion, and based on the facts and circumstances of this case and in light of the evidence developed in discovery, the Commission believes dismissal of this case is appropriate.”
