Fast Food Nation

He became embroiled in more than two dozen lawsuits

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Unformatted text preview: ts in Texas, added higher-priced dinners to the menu, and for the first time began to expand by selling franchises. The new menu items and the restaurants in Texas fared poorly. The value of CKE’s stock fell. In 1988, Carl and half a dozen members of his family were accused of insider trading by the Securities and Exchange Commission (SEC). They had sold large amounts of CKE stock right before its price tumbled. Carl vehemently denied the charges and felt humiliated by the publicity surrounding the case. Nevertheless, Carl agreed to a settlement with the SEC — to avoid a long and expensive legal battle, he said — and paid more than half a million dollars in fines. During the early 1990s, a number of Carl’s real estate investments proved unwise. When new subdivisions in Anaheim and the Inland Empire went bankrupt, Carl was saddled with many of their debts. He had allowed real estate developers to use his CKE stock as collateral for their bank loans. He became embroiled in more than two...
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This note was uploaded on 02/25/2014 for the course MGMT 120 taught by Professor Litt during the Spring '08 term at UCLA.

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