SAN DIEGO – An investor in shares of Yum Brands, Inc. filed a lawsuit alleging insider selling.
The plaintiff alleged that certain directors and officers at Yum Brands knew that antibiotic levels in chicken purchased from farmers in China was in violation of Chinese food safety standards. The company knew which supplier was selling the tainted chickens, but continued buying product from the supplier, according to the lawsuit.
Yum shares dropped in early February after news reports surfaced that Yum Brands bought chickens that had excessive hormones, antibiotics and other chemicals for at least three years, according to the lawsuit. The plaintiff claims that while outside shareholders were damaged, many shareholders inside the company profited by selling Yum shares worth more than $64 million between Oct. 9, 2012 and Feb. 4, 2013.