Tuesday, July 28, 2020
On Notice
No company wants to receive a Wells Notice from the Security and Exchange Commission. It is a statement of intent to conduct regulatory action against the business. It is also a major PR and reputational challenge for the organization, and its stock will almost certainly take a hit as it did for Under Armor, the athletic clothing manufacturer. Getting examined by the SEC is a serious business. The agency doesn't move unless there is probable cause for doing so. In this case, it was accounting chicanery -- moving sales from one quarter to another in order to look better. Under Armor's CEO and CFO say they are not guilty and they look forward to clearing the potential charge with the SEC. Good luck on that.
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