Adidas AG has successfully defended itself against a class-action lawsuit alleging securities fraud related to its partnership with Ye (formerly Kanye West). The lawsuit claimed that Adidas failed to inform its shareholders about serious issues with Ye’s behavior, which had reportedly been known since 2018. Investors argued that the company’s lack of disclosure led to significant losses when Adidas eventually severed ties with Ye in 2022 due to his antisemitic remarks and erratic actions.

On August 16, Judge Karin Immergut dismissed the case, stating that while Ye’s conduct was “erratic, inappropriate, and antisemitic,” it did not constitute securities fraud. Immergut emphasized that the legal question was whether Adidas misled investors about the risks associated with Ye’s behavior, and on the current evidence, the answer was no.

Adidas’s partnership with Ye, which lasted nearly a decade, ended amid controversy in 2022, leading to a $655 million sales loss in the final quarter of the year and $1.3 billion in unsold Yeezy inventory. The breakup also sparked further legal battles over funds and disposal of the unsold products. Despite these challenges, the court found that Adidas did not breach securities laws by failing to disclose concerns about Ye’s behavior to shareholders.