The Securities and Exchange Commission has charged former McDonald's CEO Stephen J. Easterbrook with making "false and misleading statements" to investors about his firing in 2019.
The executive entered into a $40 million separation agreement on the basis that he was fired without cause, when in reality it was related to his inappropriate relationship with an employee. At issue was Easterbrook's equity holdings. The agreement stating the termination was without cause allowed him to hold onto his shares, which otherwise would have been forfeited.
"When corporate officers corrupt internal processes to manage their personal reputations or line their own pockets, they breach their fundamental duties to shareholders, who are entitled to transparency and fair dealing from executives," said Gurbir S. Grewal, director of the Division of Enforcement. "By allegedly concealing the extent of his misconduct during the company’s internal investigation, Easterbrook broke that trust with — and ultimately misled — shareholders."
The SEC charges also state that Easterbook withheld the fact that he had maintained additional relationships with employees in order to give himself a better deal.
"Public issuers, like McDonalds’s, are required to disclose and explain all material elements of their CEO’s compensation, including factors regarding any separation agreements," said Mark Cave, associate director of the Division of Enforcement.
The agency said Easterbrook has consented to a cease-and-desist order that imposes a $400,000 civil penalty and a five-year ban on holding officer and director positions at public companies.
OpenAI has announced that ChatGPT will soon engage in "erotica for verified adults." CEO Sam Altman says the company aims to allow more user freedom for adults while setting limits for teens. OpenAI isn't the first to explore sexualized AI, but previous attempts have faced legal and societal challenges. Altman believes OpenAI isn't the "moral police" and wants to differentiate content similar to how Hollywood differentiates R-rated movies. This move could help OpenAI, which is losing money, turn a profit. However, experts express concerns about the impact on real-world relationships and the potential for misuse.
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