Under Armour says it gets Wells Notices from SEC
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Securities regulators have warned Under Armour Inc., its founder Kevin Plank and its chief financial officer that they could face civil-enforcement action related to the sportswear maker's past accounting practices.
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Under Armour said the Securities and Exchange Commission had sent Wells Notices on July 22 to the company, Mr. Plank and finance chief David Bergman. The notices relate to the company's disclosures around its accounting in 2015 and 2016 and "pull forward" sales during those periods.
FEDERAL INVESTIGATORS PROBE UNDER ARMOUR'S ACCOUNTING
A Wells Notice is a letter saying the SEC plans to bring an enforcement action against a company or individual and gives the recipients a chance to argue why they shouldn't be filed.
|UA||UNDER ARMOUR INC||9.78||-0.05||-0.51%|
The Wall Street Journal reported in November 2019 that the SEC and the Justice Department were investigating the company's accounting practices to determine whether the company shifted sales from quarter to quarter to appear healthier, according to people familiar with the matter.
In response to the Journal article, Under Armour disclosed the probe and said it had been cooperating with the Justice Department and the SEC since July 2017. "The company firmly believes that its accounting practices and disclosures were appropriate," Under Armour said in November.
UNDER ARMOUR SHARES WHACKED AS FEDS PROBE ACCOUNTING PRACTICES
Shares of Under Armour fell nearly 4% in premarket trading Monday.
Former Under Armour executives told the Journal in November that they scrambled to meet aggressive sales targets, borrowing business from future quarters to mask slowing demand in 2016 for the company's athletic apparel.