Legal

JAY-Z Subpoenaed By Feds In Securities Fraud Probe

By HHL JT

The Securities and Exchange Commission has issued a subpoena compelling JAY-Z to testify in a federal securities laws probe into Iconix Brand Group Inc.

In 2007, Iconix paid JAY-Z $200 million to acquire assets of Rocawear.

This is the third time the SEC has subpoenaed HOV in their investigation of Iconix's financial reporting practices.

So far he has refused to testify and has declined to provide additional dates for when he could appear in court. If he continues to do so, the SEC could seek sanctions against him, even though he isn't implicated in Iconix's fraud.

Hov's representative explained why JAY refuses to appear. 

"Mr. Carter had no role in that reporting or Iconix’ s other actions as a public company," the rep said. "Mr. Carter is a private citizen who should not be involved in this matter."

Here's the SEC's order against JAY-Z.

The Securities and Exchange Commission has filed a subpoena enforcement action against Shawn Carter seeking an order directing him to comply with an investigative subpoena for his testimony.

According to the application and supporting papers, which were filed in federal court in the Southern District of New York, the SEC is investigating potential violations of the federal securities laws related to the financial reporting of New York-based Iconix Brand Group, Inc., which paid Carter more than $200 million to acquire intangible assets associated with Carter's Rocawear apparel brand. After the acquisition, Carter and Iconix maintained publicly-disclosed partnerships related to the Rocawear brand.

In March 2016, Iconix publicly announced a $169 million write down of Rocawear, and in March of this year, Iconix announced a further write down of $34 million. The SEC's application states that the Commission seeks Carter's testimony to inquire about, among other things, Carter's joint ventures with Iconix. The SEC initially issued a subpoena for Carter's testimony on November 16, 2017. On February 23, 2018, after Carter retained new counsel, the SEC issued a second subpoena for Carter's testimony. Carter failed to appear as required by the subpoenas and, through his counsel, Carter has declined to provide any additional dates on which he will agree to appear for investigative testimony.

As stated in the SEC's application, a subpoena enforcement action is appropriate where the information sought from the witness is relevant to the investigation. The application does not reflect a determination by the SEC or its staff that Carter has violated provisions of the federal securities laws at issue in the investigation.

Posted In: Legal Jay Z

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