Fazoli’s, Johnny Rockets, and Twin Peaks parent company FAT Brands received a Wells Notice from the U.S. Securities and Exchange Commission, according to a Feb. 15 SEC notice.
A Wells Notice, according to Cornell Law School, is a letter sent by an SEC regulator notifying the respondent of prospective civil charges that might be brought against the respondent at the conclusion of an investigation into alleged wrongdoings. Although it does not necessarily indicate that charges will be brought against the aforementioned party, the respondent has 30 days to respond to the notice in the form of a Wells Submission.
“FAT Brands Inc., Andrew Wiederhorn, and one current and one former officer of the company each received a ‘Wells Notice’ from the Staff of the U.S. Securities and Exchange Commission relating to the previously disclosed SEC investigation of the company,” the SEC notice said. “The company believes that all conduct relating to the investigation and the Wells Notices occurred during or prior to fiscal year 2020.”
Wiederhorn has been under investigation by federal authorities since Feb. 2022 on allegations of securities and wire fraud, money laundering and attempted tax evasion, including accusations of “devising and executing a fraudulent scheme” resulting in tax evasion and laundering “millions of dollars” in fraudulent loans from his companies. He previously served time in prison for tax fraud from 2005-2006.
In March 2023, Andy Wiederhorn stepped down as CEO of FAT Brands, though he remained on as a board member and his family company, Fog Cutter Holdings LLC, has continued on as controlling shareholder of the company at 55.5% control of the company. In May 2023, FAT Brands announced the appointment of two new co-CEOs, Ken Kuick and Rob Rosen, who have also continued in their roles as chief financial officer and executive vice president of capital markets for the company.
Both the company and Wiederhorn have maintained their innocence throughout the SEC investigation, with the company clarifying in the Feb. 15 SEC notice that, “a Wells Notice is neither a formal charge of wrongdoing nor a determination that the recipient has violated any law. The company is continuing to cooperate with the SEC and maintains that its actions were appropriate, and intends to pursue the Wells Notice process, including submitting a formal response to the SEC.”
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