Fatburger Parent's Stock Jumps Premarket After Doj Drops Financial Misconduct Charges Against Firm, Former CEO

Fat Brands (FAT) shares climbed 8% in premarket trading on Wednesday, a day after the restaurant operator said that the U.S. Justice Department dropped charges of alleged financial irregularities against the company and its former management.

The U.S. Attorney for the Central District of California has filed a motion to dismiss all charges against Fat Brands, former CEO Andrew Wiederhorn, former CFO Rebecca Hershinger, and tax advisor William Amon, according to a statement.

The persons mentioned were accused of concealing loans Wiederhorn had improperly drawn as compensation, and falsifying auditor and tax filings for tax evasion.

On Stocktwits, the retail sentiment for Fat Brands' shares shifted to 'neutral' as of early Wednesday, from 'bearish' the previous day. FAT shares are down 19% year-to-date.

Earlier this month, Fat Brands elevated Taylor Wiederhorn, son of Andrew Wiederhorn and the former chief development officer, to co-CEO.

Fat Brands is a global franchising company that owns 18 restaurant brands, including Fatburger, Johnny Rockets, and Twin Peaks.

Last year, the company spun off Twin Hospitality Group, which includes brands like Twin Peaks and Smokey Bones. In January, Twin Hospitality's shares began trading under the TWNP ticker on the Nasdaq Global Market.

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