North East Scotland Pension Fund settles Under Armour lawsuit

Lawyers acting for the North East Scotland Pension Fund (NESPF) have secured a $434m settlement from Under Armour.

The fund, which administers pensions for 71,000 staff at Aberdeen, Aberdeenshire and Moray councils, invested around £6m in the US sportswear company’s stock, but accused it of making false statements about products.

The BBC reported that the proposed settlement, pending court approval, comes weeks before a jury trial was due to begin in the US.

The suit was handled by the US firm Robbins Geller Rudman and Dowd, whose partner Mark Solomon said: “This is an important win for investors and a strong message to the directors and officers of public companies.

“Prior government enforcement efforts yielded a modest $9m penalty, so obtaining a recovery almost 50 times greater underscores the critical role pension funds can play in holding companies accountable.”

The announcement included a comment from NESPF: “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.”

Under Armour is listed on the New York Stock Exchange and has a market capitalisation of more than £2bn.

A statement on the company’s website said it had consistently denied the accusations and had “entered into this agreement in principle, which is not an admission or finding of fault or wrongdoing, given the costs and risks inherent in litigation“.

It will pay $434m to settle claims brought on behalf of purchasers of publicly-traded shares from 16 September 2015 to 1 November 2019.

Under Armour’s chief legal officer and corporate secretary Mehri Shadman commented: “We firmly believe that our sales practices, accounting practices and disclosures were appropriate, and deny any wrongdoing in this case.

“Today’s announcement allows us to move past this more than seven-year-old matter so we can avoid the ongoing distraction of litigation and provide certainty to the business at a time when we are executing on important strategic priorities.“

Don’t miss the latest headlines with our twice-daily newsletter – sign up here for free.