Councils pension fund settles Under Armour legal claim
The clothing firm has a market value of more than $3bn
- Published
Lawyers acting for a pension fund representing workers in three Scottish councils have secured a $434m settlement from US sportswear company Under Armour.
The North East Scotland Pension Fund (NESPF) administers a scheme for 71,000 workers including Aberdeen, Aberdeenshire and Moray council staff.
The fund invested millions of pounds in Under Armour stock but accused the firm of making false statements about its products.
The proposed settlement, pending court approval, comes weeks before a jury trial was due to begin in the USA.
NESPF has been acting as the lead plaintiff in a class action against Under Armour.
A class action is a type of lawsuit where one plaintiff brings forward the claim on behalf of a larger group of people who have suffered a similar loss.
The BBC has previously reported that more than £6m had been lost from the joint council fund.
'Important win for investors'
The lawsuit was handled by the US firm Robbins Geller Rudman and Dowd LLP.
Mark Solomon, a partner in the firm and counsel to the NESPF as lead plaintiff, 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. Obtaining a recovery almost 50 times greater underscores the critical role pension funds can play in holding companies accountable."
The firm's announcement of the settlement includes a comment on behalf of the fund.
It 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 fund has been approached by BBC News for further comment.
'Not an admission'
Under Armour is based in Baltimore, Maryland. It was founded in 1996 by former college football player Kevin Plank.
It is listed on the New York Stock Exchange (NYSE) and has a market cap of $3bn (£2.3bn).
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".
The statement confirms that the company will pay $434m to settle claims brought on behalf of purchasers of the company's publicly-traded shares from 16 September 2015 to 1 November 2019.
It says the settlement, if approved by the court, "would resolve all claims against Under Armour and other defendants in this matter".
The company's chief legal officer and corporate secretary Mehri Shadman said: "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."