Under Armour executives were warned they could be charged over accounting disclosures that may have violated securities laws

SEC investigators intend to recommend that the SEC move forward with allegations that Under Armour executives violated securities laws, according to documents released July 22.

The SEC sent Under Armour a Wells Notice warning Kevin A. Plank, Under Armour founder, and David E. Bergman, Under Armour CFO, that they could face SEC enforcement for allegedly manipulating company sales in a way that violates securities laws.

The SEC is scrutinizing Under Armour over disclosure-related allegations around its use of “pull forward” sales tactics throughout 2015 and 2016. When a company “pulls forward,” it shifts sales between financial quarters in order to meet sales goals.

Though a Wells Notice does not formally charge the company of breaking laws, it does indicate that SEC staff has recommended pursuing enforcement action. About 80% of companies served with a Wells Notice face charges, according to a WSJ analysis of government data. 

Source: Business Insider

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