U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20142 / June 4, 2007
SEC v. Michael J. Snyder (United States District Court for the District of Colorado, Civil Action No. 07-CV-01162)
SEC Charges Former Chief Executive Officer of Red Robin Gourmet Burgers, Inc. With Fraud Arising From Failure to Report Compensation
The Securities and Exchange Commission today filed civil fraud charges against Michael J. Snyder, the former CEO of Red Robin Gourmet Burgers, Inc. ("Red Robin"), arising from Snyder's misrepresentation of personal travel expenses as business expenses to Red Robin and its accountants. The Commission's complaint, filed in the United States District Court for the District of Colorado, alleges that Snyder's misrepresentations caused Red Robin to fail to report material amounts of Snyder's compensation in Commission filings for the years 2002 through 2004.
Red Robin, headquartered in Greenwood Village, Colorado, owns and franchises a chain of restaurants in the United States and Canada. The Commission's complaint alleges that, during 2002, 2003 and 2004, Snyder incurred personal travel expenses of roughly $1.2 million for charter jet travel, and hotel and dinner expenses. The Complaint further alleges that Snyder submitted expense reports and invoices to Red Robin for payment of these personal expenses, misrepresenting that a business purpose existed for the charter jet trips and hotel and dinner expenses, failing to report the presence of personal guests on the trips, and failing to accurately report the destinations of the charter flights.
The Commission's complaint charges Snyder with violations of Sections 10(b) and 14(a) of the Securities and Exchange Act of 1934 ("Exchange Act") and Rules 10b-5 and 14a-9 thereunder, and Section 17(a) of the Securities Act of 1933. The complaint further charges Snyder with violations of Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2 thereunder, and with aiding and abetting Red Robin's violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder, and with directly violating Rule 13a-14. The Commission's complaint seeks a permanent injunction, civil penalties, and an order barring Snyder from serving as an officer or director of a public company.
Without admitting or denying the allegations in the Commission's complaint, Snyder consented to the entry of a final judgment permanently enjoining him from violating or aiding and abetting violations of the federal securities laws listed above. Snyder also consented to the imposition of a $250,000 civil penalty, and an officer and director bar.