Under Armour Inc. Pulls Sales Forward, SEC And Stockholders Push Back

As the culmination of an SEC investigation into Under Armour Inc.'s "pull forward" practice leads to charges, Under Armour agrees to cease and desist and settles for $9 million.

Following an investigation dating back to 2015, the SEC claimed Under Armour misled investors by not disclosing the reason for its growth in revenue and what that meant for the business. The SEC charged Under Armour with violations of "antifraud provisions of Section 17(a)(2) and (3) of the Securities Act of 1933, as well as certain reporting provisions of the federal securities laws."

The SEC alleged Under Armour, faced with an inability to meet its estimated revenues, began pulling forward "existing orders that customers had requested be shipped in future quarters." Under Armour allegedly accelerated sales for six quarters, totaling $408 million. This practice allowed Under Armour to claim that it was on target to reach expected revenues. However, accelerating these sales meant that