MARCH 1, 2018

Prescott Lovern, Sr. says The Wendy’s Company (Wendy’s) filed an illegal 10 K on Feb. 28, 2018, with the SEC. In their 10 K [signed by all Directors, CEO Todd A. Penegor and CFO Gunther Plosch] Wendy’s failed to disclose “non-routine” potential catastrophic liability that Wendy’s cannot guarantee to investors that said liability will not “materialize,” required by federal law [U.S. Supreme Court precedent] and District of Columbia securities law.

Instead of complying with the law Wendy’s used generic boilerplate language prohibited by SEC Rules. 2017 SEC Corporation Finance – 303 Staff Manual, which states;

“MD&A should not consist of generic or boilerplate disclosure. Rather, it should reflect the facts and circumstances specific to each individual registrant. S-K 303 is a       ‘principles-based’ disclosure requirement. It is intended to provide management with     flexibility to describe the financial matters impacting the registrant. [underline added].

From the 10 K:

“We are involved in litigation and claims incidental to our current and prior businesses, including the legal proceedings related to a cybersecurity incident as described in ‘Item 3. Legal Proceedings.’ We provide accruals for such litigation and claims when payment is probable and reasonably estimable. Most proceedings are in preliminary stages, with various motions either yet to be submitted or pending, discovery yet to occur and significant factual matters unresolved. In addition, most cases seek an indeterminate amount of damages and many involve multiple parties. Predicting the outcomes of settlement discussions or judicial or arbitral decisions are thus inherently difficult. We review our assumptions and estimates each quarter based on new developments, changes in applicable law and other relevant factors and revise our accruals accordingly.”

Stay tuned.

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