Adidas Sued for Hiding Ye’s Antisemitism

Why investors are taking Adidas to court

According to a newly revived complaint, Adidas executives were aware of Ye’s “extreme antisemitism” years before the rapper’s public meltdown in 2022. The suit alleges that by 2013—seven years before Ye tweeted antisemitic slurs and two years before the Yeezy line officially launched—company insiders had:

• Heard disturbing comments by Ye during design meetings in Germany.
• Seen a proposed sneaker featuring a swastika on the insole.

Yet Adidas continued promoting Yeezy shoes—ultimately generating an estimated 8% of total company revenue—without disclosing the mounting reputational risk to shareholders.

The legal theory: securities-fraud by omission

U.S. securities law requires public companies to warn investors about “known trends and uncertainties” that could materially affect financial performance. Think data breaches at tech firms or toxic product risks at consumer-goods companies.

Plaintiffs argue that Ye’s documented behavior fit squarely within that disclosure rule. By allegedly keeping it quiet, Adidas:

1. Inflated its stock price through “false or misleading statements.”
2. Deprived investors of the chance to reassess risk before buying or holding shares.

What happened in court so far?

A federal district judge initially dismissed the class action, finding the allegations too speculative. But earlier this week, investors urged the Ninth Circuit Court of Appeals to reverse that decision.

Their core message to the appellate panel: if tech giants such as Alphabet must disclose known internal problems (like data-privacy lapses), Adidas should likewise disclose known brand-partnership risks.

Adidas fired back, insisting that “securities law doesn’t cover bad celebrity break-ups” and that the company couldn’t reasonably foresee Ye’s future outbursts.

Potential outcomes—and why they matter

If the Ninth Circuit sides with investors, the case would return to the trial court for discovery, opening company emails and board minutes to scrutiny. A win could mean:

• Monetary recovery for shareholders who bought Adidas stock before the partnership collapsed.
• A precedent forcing brands to rethink how they vet and monitor celebrity collaborators.
• Stronger disclosure obligations industry-wide when reputational risks can be documented.

Conversely, if the dismissal stands, companies may gain wider latitude to frame celebrity endorsements as unpredictable “human behavior” outside securities law.

What should Adidas investors do now?

• Check your brokerage statements for Adidas shares purchased before October 2022. You may qualify for class-action status if the Ninth Circuit revives the case.

• Preserve relevant trade confirmations and account statements; they are often required to claim any eventual settlement.

• Stay informed. We track every major securities case and notify subscribers about filing deadlines and payout opportunities.

This article is for informational purposes only and is not legal advice. Consult a qualified attorney about your specific situation.