• May 23, 2012

Chipotle Mexican Grill has publicly acknowledged that it is being investigated by the Justice Department and SEC for allegations relating to employing undocumented, illegal immigrants.

A Chipotle spokesperson told The Wall Street Journal that it appears both investigations are focused on the restaurant chain's disclosures regarding work authorization compliance, both in its SEC filings and other communications with investors.

The spokesperson also stressed that Chipotle believes that it has been "open and transparent" with investors about these issues.

In late 2010, about 450 Minnesota Chipotle workers -- more than half of its employees in that state -- were lost as the result of an audit of employee records by Immigration and Customs Enforcement. Chipotle also lost employees in Washington, D.C. and Virginia last year as a result of such enforcement actions.

Chipotle, which employs about 35,000 total workers, has been continuing to open new units at a rapid pace; it now has about 1,250 in the U.S. Its same-store sales jumped 11% in 2011, and its stock has risen by 40% over the past year.