The shares of Fat BrandsOn Tuesday, more than 20% of the market was flooded with news that Fatburger and Johnny Rockets’ parent company had been investigating its CEO for several months.

Fat Brands stated in a regulatory filing that the U.S. Attorney’s Office for the Central District of California and the Securities and Exchange Commission informed the company in December they had started investigating Andrew Wiederhorn.

According to the filing, the government seeks documents and material related to Fat Brands’ December 2020 merger with Fog Cutter Capital Group and any transactions between Wiederhorn (and those entities) Fog Cutter Capital holds the majority stake in Fat Brands. Wiederhorn is also its largest shareholder.

Investigative teams are looking at whether Wiederhorn received compensation or extensions of credit. Thayer, Wiederhorn’s younger brother is the chief operating officer.

Following the disclosure a Los Angeles Times reportSamstag reported that Wiederhorn is being accused of securities fraud and wire fraud as well as money laundering and tax evasion. The newspaper also reported that federal agents raided the home of Thayer Wiederhorn and his wife Brooke — daughter of former Real Housewives of Beverly Hills star Kim Richards — in December.

Fat Brands stated in a statement that the government had informed FAT Brands about its investigation. The Company was fully cooperating. “The investigation has not targeted the Company.”

According to the filing by the company, it stated in part that they are unable estimate the results or length of the current government investigation.

Douglas Fuchs, Wiederhorn’s lawyer stated that his client denies all allegations in a statement to CNBC. They also plan to prove that the government is wrong.

Fuchs stated that the loans were legitimate, and had been independently approved. Fuchs added that Mr. Wiederhorn had his tax returns prepared by tax professionals who were independent and approved. He has also been paying taxes under an IRS approved plan.

Fuchs said that he cannot comment further on these allegations, as the government has not provided them with the copy of the Affidavit despite requests.

CNBC requested comment immediately from the SEC. The U.S. attorney’s office representative declined to comment.

Wiederhorn has been under investigation several times for financial crimes. Fog Cutter Capital’s founder, Wiederhorn pled guilty to fraudulent tax returns and illegal gratuity payments. A $2 million penalty was imposed on him and he spent nearly a full year in Oregon federal prison. Fog Cutter was sentenced to a year in federal prison. His board decided to give him a bonus equivalent to his fine, and to continue paying his salary. This decision attracted much criticism.