Under Armour Paying $9 Million to Fix SEC Accounting Probe
< img src=" https://images.wsj.net/im-333500/social" class=" ff-og-image-inserted"/ > WASHINGTON– Under Armour Inc.. UA -0.15% accepted pay $9 million to settle regulatory claims that it failed to disclose that it was pulling forward orders from future quarters, a practice that permitted it to fulfill Wall Street’s revenue price quotes.
The Baltimore-based clothing business fixed the Securities and Exchange Commission examination without admitting or rejecting wrongdoing, the SEC said Monday. The Wall Street Journal reported in 2019 that federal officials were taking a look at whether the sportswear maker moved sales from quarter to quarter to appear much healthier.
The SEC doesn’t prepare to take any enforcement action versus Kevin Slab, the company’s co-founder and executive chairman, or Chief Financial Officer David Bergman, Under Armour said in a news release. Under Armour formerly disclosed that the two guys had actually been told they could be taken legal action against by the SEC.
The practice of pulling forward about $408 million in orders occurred over 6 consecutive quarters beginning in the third quarter of 2015, the SEC said. The sales included orders that clients had actually asked for be delivered in future durations, the SEC said.
The regulator alleged the business misled investors by not disclosing a significant part of its income and income growth arised from the practice. The lack of disclosure produced “considerable uncertainty” about whether Under Armour would fulfill its earnings guidance in future quarters, the SEC stated in a press release.
” Under Armour developed a deceptive photo of the drivers of its financial results and hid recognized unpredictabilities worrying its service,” SEC Denver Regional Director Kurt Gottschall stated in a statement.
Under Armour’s need to pull forward sales orders to fulfill quarterly targets prompted the business to provide rewards such as discounts or extended payment terms to wholesale customers, the SEC stated in a settlement order. In one case, in September 2016, a company that was asked to dedicate to purchasing more products replied: “We just brought a bunch of your products in early to assist your quarter … Now you desire more … More. More. more..30% [price discount rate] please.”
Under Armour provided the company a 25% discount and an additional month to pay, the SEC said in the order.
Under Armour stated in its news release that it hasn’t gotten any ask for information from the Justice Department because the second quarter of 2020. The Journal reported in 2019 that the DOJ and SEC were examining Under Armour. Compose to
Dave Michaels at [email protected]!.?.! Copyright © 2020 Dow Jones & Business, Inc. All
Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8 Published at Mon, 03 May 2021 22:13:00 +0000 Attribution- For
more Details here is the Article Post Source: https://www.wsj.com/articles/under-armour-paying-9-million-to-resolve-sec-accounting-probe-11620079991?mod=pls_whats_news_us_business_f