(Reuters) – Under Armour Inc disclosed on Monday that its top executives had received a Wells notice from the U.S. Securities and Exchange Commission related to an investigation about the sportswear maker’s accounting practices.
Last year, the company said it was cooperating with federal investigators in connection with a probe about whether it shifted sales from quarter to quarter to meet objectives.
While a Wells notice does not necessarily mean the recipients have violated any law, the SEC issues the letter to firms when it is planning to bring an enforcement action against them.
A filing on Monday showed that the staff of the SEC is recommending that the regulatory body file an enforcement action against the company, founder and executive chairman Kevin Plank and Chief Financial Officer David Bergman, that would allege certain violations of federal securities laws. (https://bit.ly/2BCWOHA)
Under Armour and the executives said that their actions were appropriate and they intend to pursue the Wells Notice process.
Shares of the company were down nearly 4% in premarket trading.
(This story corrects paragraph 4 to say Kevin Plank is the founder and executive chairman, not CEO)
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Saumyadeb Chakrabarty)