On the Eve of Jury Trial, Under Armour Investors Secure $434 Million in Securities Fraud Suit

One of the Top 50 Securities Class Action Recoveries in U.S. History

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June 21, 2024

On the eve of a federal jury trial, Robbins Geller Rudman & Dowd LLP secured a $434 million recovery for investors in a securities fraud class action suit against Under Armour and CEO Kevin Plank. North East Scotland Pension Fund led the action as lead plaintiff on behalf of the investor class.

The proposed settlement was announced just weeks before a jury trial was scheduled to commence on July 15, 2024 before the Honorable Richard D. Bennett of the United States District Court for the District of Maryland. The settlement is subject to court approval.

“This is an important win for investors and a strong message to the directors and officers of public companies,” said Mark Solomon, a Robbins Geller partner and counsel to the lead plaintiff. “Prior government enforcement efforts yielded a modest $9 million penalty. Obtaining a recovery almost 50 times greater underscores the critical role pension funds can play in holding companies accountable,” he added.

If approved by the court, the settlement here will represent the second largest ever securities class action recovery in the Fourth Circuit and one of the top 50 largest such recoveries in U.S. history.

“Our trial team was looking forward to trying the case to a jury. The readiness of our team to try the case and do so effectively was instrumental in helping us obtain this outsized recovery,” said Robert R. Henssler, Jr., Robbins Geller partner and lead trial counsel.

A spokesperson for the North East Scotland Pension Fund, which served as lead plaintiff for the class of investors, said: “We are pleased to have helped secure this exceptional outcome. We decided that stepping forward to lead the litigation and hold defendants accountable was an appropriate exercise of our stewardship role, and we welcomed the opportunity to do so.”

The Key Allegations in the Under Armour Case

The case alleges that Under Armour, Inc. and CEO Kevin Plank violated U.S. securities law by making materially false and misleading statements and failing to disclose adverse information about Under Armour’s business and operations to investors. The allegations focus on Under Armour’s alleged “pull-forward” revenue recognition scheme that masked declining demand for its products. Investors had been repeatedly assured, according to the allegations in the suit, that Under Armour’s 26-consecutive quarter 20% year-over-year revenue growth streak was “safely intact,” when demand for the company’s products was in decline.

The suit claims that the company’s financial results were manipulated to mask this decline by pulling sales forward from future quarters and other suspect sales practices.

In 2017, Under Armour revealed its lower than anticipated fourth quarter revenues and a drop in quarterly revenue growth of over 20% for the first time in 26 quarters. The company also announced the unexpected resignation of its CFO after only 13 months on the job. After this news was made public, the price of Under Armour shares fell over 25%. The investor suit followed.

“Our client was determined to secure meaningful accountability on behalf of injured investors. Although the case was a battle at every step, we are glad to have helped secure a significant recovery for investors,” said Sam S. Sheldon, a Robbins Geller partner and trial team member.

The following Robbins Geller attorneys represented investors in this case: Matthew I. Alpert, X. Jay Alvarez, Stephen R. Astley, Michael J. Dowd, T. Alex B. Folkerth, Luke Goveas, Robert R. Henssler, Jr., Christopher R. Kinnon, Andrew T. Rees, Sam S. Sheldon, Elizabeth A. Shonson, and Mark Solomon.

About Robbins Geller 
Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex litigation firms, representing plaintiffs in securities fraud, shareholder derivative, antitrust, corporate takeover, and consumer fraud and privacy cases. With 200 lawyers in 10 offices, Robbins Geller is one of the world’s largest plaintiffs’ firms, and the Firm’s attorneys have obtained many of the largest securities, antitrust, and consumer class action recoveries in history. 
Over the last decade, our Firm has been ranked #1 on the ISS Securities Class Action Services law firm rankings for six out of the last ten years for securing the most monetary relief for investors. In the last four years, Robbins Geller recovered $6.6 billion for investors in securities-related class action cases – over $2.2 billion more than any other law firm during that time. The Firm secured the largest-ever securities fraud class action settlement – $7.2 billion – in In re Enron Corp. Securities Litigation. 

For media inquiries, please contact media@rgrdlaw.com or call (619) 338-3821. 

In re Under Armour Securities Litigation, No. 1:17-cv-00388-RBD (D. Md.).

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