U.S. Securities and Exchange Commission Litigation Release No. 26510, dated March 27, 2026.
The SEC announced the dismissal of its civil enforcement action against FAT Brands, Inc. and its executives. This decision was made on March 27, 2026, based on the facts and circumstances developed during discovery. The dismissal is with prejudice, meaning the case cannot be refiled.
In Plain English
Imagine the SEC was like a referee in a game, and they accused a company and its leaders of breaking the rules. After looking closely at all the evidence, the SEC decided to drop the case. This means the company and its leaders are no longer accused of breaking those specific rules in this particular game.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- SEC Files Civil Enforcement Action On May 10, 2024, the U.S. Securities and Exchange Commission (the "Commission") filed a complaint initiating a civil enforcement action against FAT Brands, Inc., Andrew Wiederhorn, Ron Roe, and Rebecca D. Hershinger. This marked the beginning of the legal proceedings in the United States District Court for the Central District of California.
- Discovery and Evidence Development Following the filing of the complaint, the parties engaged in the discovery process. This phase involved the exchange of information and evidence relevant to the allegations made in the Commission's complaint.
- Joint Stipulation for Dismissal On March 27, 2026, the Commission and the Defendants submitted a joint stipulation to the court. This document indicated their mutual agreement to have the civil action dismissed.
- SEC's Discretionary Decision The Commission stated that its decision to seek dismissal was made in the exercise of its discretion. This decision was based on the specific facts and circumstances of the case, as well as the evidence that had been developed during the discovery process.
- Dismissal with Prejudice Pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), the parties stipulated that the Civil Action be dismissed with prejudice. This means the case is permanently closed, and the Commission cannot bring the same claims against these defendants again.
- No Costs or Fees As part of the stipulation, the parties agreed that the dismissal would be without costs or fees to either party. This means neither the SEC nor the defendants will have to pay the other's legal expenses related to this action.
- Defendants Waive Claims The Defendants, for themselves and their representatives, waived and released any and all claims against the Commission and its officers or employees that arise from or relate to the Civil Action, including investigative steps taken prior to its commencement.
- FAT Brands Bankruptcy Consideration A note in the stipulation indicates that FAT Brands Inc. filed for Chapter 11 bankruptcy on January 26, 2026. Therefore, the waiver and release terms concerning FAT Brands Inc. are subject to approval by the bankruptcy court.
- Case Dismissed The joint stipulation was filed with the court on March 27, 2026, leading to the dismissal of the SEC's civil enforcement action against FAT Brands, Inc. and its executives.
The Enforcement Action
On March 27, 2026, the U.S. Securities and Exchange Commission filed a joint stipulation with FAT Brands, Inc., Andrew Wiederhorn, Ron Roe, and Rebecca D. Hershinger to dismiss, with prejudice, the Commission’s civil enforcement action against them. The Commission stated that its decision to seek dismissal was based on the facts and circumstances of the case and in light of the evidence developed in discovery, and does not reflect the SEC’s position on any other case. The dismissal is without costs or fees to either party. FAT Brands Inc. filed for Chapter 11 bankruptcy on January 26, 2026, and its waiver and release terms are subject to bankruptcy court approval.