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Government documents have described CKE Restaurants, parent company of Hardee's and Carl's Jr., as "the victim of a corporate extortion scheme."
As a result, the United States Attorney in the Eastern District of Missouri has issued a criminal complaint against Clive Munro, an analyst who issues stock reports under the name of Javelin Research and Montecito Research. Munro, who is located in Cheyenne, Wyoming, was charged with extortion, wire fraud, and securities fraud.
The criminal complaint is filed in the federal court in St. Louis, Missouri. It states in part that, beginning on September 15, 2004, Munro engaged in a series of communications intended to coerce CKE Restaurants into hiring him as a consultant. Munro has issued written reports on CKE's financial performance and its stock in the name of Javelin Research. According to the complaint, Munro had recently issued several negative reports on CKE and asked to be paid the sum of $25,000 per month to withhold any further such reports.
On October 15, 2004, Munro communicated to various entities, including some of CKE's investors, that the company had retained him and Javelin Research as a consultant, which was untrue. Any discussions conducted by CKE Restaurants, Inc. and Munro concerning "consulting" were at the request and under the direction of the federal officials conducting the investigation.