BALTIMORE, United States – Under Armor Inc. announced on Monday that his top executives had received a Wells report from the United States Securities and Exchange Commission regarding an investigation into the sportswear maker’s accounting practices.
Last year, the company said it was collaborating with federal investigators on an investigation into whether it was shifting revenue from quarter to quarter to meet its targets.
While a Wells notice doesn’t necessarily mean that the recipients have broken a law, the SEC gives the letter to companies when it plans to bring an action against them.
A filing on Monday showed that SEC staff recommend that the regulatory body file an enforcement action against the company, its founder and executive chairman Kevin Plank and Chief Financial Officer David Bergman, who alleged that there have been certain violations of federal securities laws.
Under Armor and executives said their actions were appropriate and they plan to continue the Wells Notice process.
The company’s shares fell by nearly 4 percent in premarket trading.
By Aishwarya Venugopal; editor: Saumyadeb Chakrabarty