US SEC Fines Former McDonald’s CEO 500 Million Won Over Internal Scandal

[Asia Economy New York=Special Correspondent Joselgina] The U.S. Securities and Exchange Commission (SEC) has imposed a fine of $400,000 (approximately 500 million KRW) on former McDonald's CEO Steve Easterbrook, who was fired for inappropriate sexual relations with a subordinate employee. Additionally, he is barred from serving as an executive or director of a publicly listed company for the next five years.

According to the Wall Street Journal (WSJ) and others, the SEC announced on the 9th (local time) that although former CEO Easterbrook did not admit to his misconduct, he agreed to the fine and regulatory measures.

[Image source=AP Yonhap News]

Former CEO Easterbrook was dismissed from McDonald's in November 2019 after it was revealed that he violated company policies through a "consensual relationship" with a subordinate employee. However, he deliberately concealed other inappropriate relationships and misconduct with other employees during this process and received a substantial severance package. These additional sexual scandals and misconduct were only uncovered during McDonald's internal investigation the following year.

The SEC pointed out that "former CEO Easterbrook undermined trust with shareholders by concealing the extent of his illegal activities during the company's internal investigation," citing violations of U.S. securities laws and the Securities Exchange Act.

The SEC also criticized McDonald's, stating that "the company had an obligation to properly disclose relevant information before Easterbrook's dismissal." However, no separate fines were imposed. This was in consideration of McDonald's active cooperation with the SEC investigation and the fact that it filed a lawsuit against former CEO Easterbrook immediately after the internal investigation.

In a statement released that day, McDonald's emphasized its response, saying, "(After the incident) the company held former CEO Easterbrook accountable for his wrongful actions," adding, "We fired him and filed a lawsuit after discovering that he lied about his conduct." Earlier, McDonald's dropped the lawsuit at the end of 2021 on the condition that former CEO Easterbrook return severance pay worth $105 million and issue an apology statement.

A spokesperson for former CEO Easterbrook declined to comment separately that day. Easterbrook, who took office in March 2015, was regarded as an outstanding manager who improved McDonald's performance through menu revamps and cost reductions before the sexual scandal. During his tenure, McDonald's stock price nearly doubled.

This content was produced with the assistance of AI translation services.