English is a funny language. We have so many words—more, by some measures, than any other tongue—and yet so few with unique, singular meanings. Still, the term “sustainable” would seem to be among the clearest: It’s got just three distinct senses in which it is used, according to the Oxford English Dictionary, as opposed to, say, “set,” which boasts 430. And yet we can’t really seem to settle on what the word actually means, certainly not in Wall Street terms. For Vanguard, it apparently includes the profligate burning of fossil fuels. For Warren Buffett, it means a virtue-signaling waste of time and energy. For the Cheesecake Factory, it apparently means burning through $6 million of the $100 million or so it has left a week and defaulting on its leases while operating a critically-endangered business (indoor dining) in critically-endangered places (malls). Unfortunately, the Securities and Exchange Commission has a different definition.
The SEC said Friday that the company in the spring filed materially false and misleading disclosures in saying that locations were “operating sustainably.” Meanwhile, the company was losing about $6 million in cash weekly and estimated it had only about four months’ worth of cash left, according to the agency.
Cheesecake Factory didn’t admit to the SEC’s findings but agreed to a penalty of $125,000, the regulator said. The company said in a filing that it fully cooperated with the SEC.
The SEC also said the company didn’t disclose that it had told landlords it wouldn’t pay rent in April because of the pandemic’s impact.