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Kevin Plank, founder and CEO of Under Armour sportswear, in his office in Baltimore, Maryland on October 1, 2009.
Bill O’Leary | The Washington Post | Getty Images
Under Armour faces a federal criminal investigation over accounting practices allegedly used to make its finances look healthier, The Wall Street Journal reported Sunday, citing people familiar with the matter.
The probe involves allegations that the company shifted sales between quarters, according to The Journal. Investigators questioned people in Baltimore as recently as last week.
The Justice Department is conducting a criminal inquiry and is coordinating with civil investigators at the Securities and Exchange Commission, according to The Journal. The investigation has not been made public.
The SEC declined to comment. The Justice Department and Under Armour did not immediately respond to requests for comment.
Under Armour has faced a sales slump in North America amid stiff competition from Nike, Adidas and Lululemon and turmoil among its executive leadership. The company went through three CFOs in the period between 2016-2017.
The company is also in the midst of a transition in its management. CEO and founder Kevin Plank plans to step down from the top job on Jan. 1, and will be replaced by COO Patrik Frisk. Plank plans to stay on at the company as executive chairman and brand chief.
There has also been controversy over Under Armour’s work culture. Employees reportedly charged visits to strip clubs on their corporate cards to win over athletes. Under Armour ended the practice and Plank promised to build a “diverse” and “inclusive” environment at the company.
The company’s stock closed up 2.37% at $21.41 Friday. Under Armour’s stock is down nearly 11% over the past 12 months.