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Chipotle subpoenaed in California norovirus outbreak

The inquiry was yet another setback for Chipotle, which has been struggling to contain the damage to its sales and reputation from a series of food-related illnesses among customers and employees, including outbreaks of E. coli in other states, in which it closed some restaurants, and, last month, a norovirus outbreak in Boston.

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Illnesses linked to Chipotle food have been reported in the Pacific Northwest and across the Northeast, including in Maryland, New York and New Jersey.

The situation continues to escalate as Chipotle was served with a federal subpoena last month surrounding a criminal investigation tied to the norovirus outbreak.

The company has been subpoenaed by a federal grand jury as part of a criminal investigation based on the shocking norovirus outbreak at the chain restaurant’s Simi Valley, California location. The subpoena involves a “broad range” of documents.

“In December, scores of students at Boston College fell ill after eating at a nearby Chipotle, an outbreak the company said was due to a norovirus, which causes vomiting, nausea and diarrhea. They’re having a tough time, and uh, I feel awful about that, and we’re doing a lot to rectify this”. “No system is foolproof, but the FDA works to prevent as many foodborne illness outbreaks as possible”.

The sixth Chipotle-related outbreak – reported by the CDC in late December – further decreased business.

The US attorney in Los Angeles has launched a criminal probe of Chipotle centered on the Simi Valley location, the company said Wednesday in a regulatory filing.

A Chipotle spokesman, Chris Arnold, said in an email the company does not discuss pending litigation, but that it intends to co-operate fully with the investigation.

The company now estimates that fourth-quarter earnings will range from US$1.70 to US$1.90 a share. Credit Suisse analysts told CNBC that Chipotle’s issues look different from other chains’ food scares in years past-including issues at Jack in the Box, Taco Bell, McDonalds- because the cause of the outbreaks have yet to be determined.

Following that news, Chipotle’s sales for the month were down about 34%, but then stabilized in the following week at roughly 31% lower. The company said Wednesday that it approved the repurchase of up to another $300 million of its shares, in addition to a $300 million authorization approved in December.

Chipotle’s food safety issues in 2015 included multiple instances of E.coli as well as Norovirus and salmonella.

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The California restaurant in question became aware of scores of sick employees and customers around August 16 or 18, according to the inspection report, but it waited five days to inform the local health department, according to Beach. Shares of Chipotle fell almost 5% on Wednesday, to close at $426.67.

Chipotle Subpoenaed Faces Criminal Investigation After Virus Outbreak