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