Adidas shares sink after top marketing executive's arrest in NCAA probe

By RetailFOXBusiness

Adidas shares sank on the German stock exchange Tuesday after the FBI arrested James Gatto, the top marketing executive for the sports apparel company’s basketball division, on corruption charges.

Continue Reading Below

"Today, we became aware that federal investigators arrested an Adidas employee. We are learning more about the situation. We’re unaware of any misconduct and will fully cooperate with authorities to understand more," Adidas said in a statement.

The company’s stock fell

Gatto was one of the 10 individuals, including NCAA assistant basketball coaches, financial advisors and managers, as part of a federal probe into two separate corruption schemes. Authorities allege that Gallo conspired to funnel thousands of dollars in payments to top high school basketball recruits. In exchange, the recruits purportedly agreed to commit to Adidas-sponsored schools.

U.S. Attorney Joon Kim said Gatto used fake invoices and false entries to hide the alleged payments on the company’s books. Officials declined to identify Adidas by name and said no other executives from the international sportswear brand are suspected of wrongdoing.

More on this...

What do you think?