Krispy Kreme

(KKD)

said its chief operating officer found work elsewhere, resigning as the company faces a

Securities and Exchange Commission

probe and questions about the sustainability of its growth model.

John Tate accepted a new position with an unnamed firm in Northern California, the company said in a release. Chief Executive Scott Livengood will take over his duties.

The stock lost 53 cents, or 3.9%, to close Monday at $13.04, a 52-week low. Krispy Kreme traded over $35 as recently as April 23 before a stunning earnings warning gutted the shares on May 7. Part of the SEC inquiry centers on the events of that warning, which the company partly blamed on the low-carb craze.

Skeptics said that while diet trends might have been a factor, the company

was facing potentially more daunting operational issues, including the high expense of operating restaurant franchises in low-volume areas, and possibly cannibalization by grocery store sales of its doughnuts.