Published: Fri, May 04, 2018
Entertaiment | By Simon Arnold

SEC subpoenas Jay-Z to testify in probe of clothing brand

SEC subpoenas Jay-Z to testify in probe of clothing brand

Iconix paid Carter more than $200 million to acquire "intangible assets" associated with his Rocawear apparel brand.

But the SEC says Iconix's financial reporting around its Rocawear acquisition - and potentially other dealings - are suspicious.

American rapper Jay-Z, pictured here performing Bercy arena in Paris, Oct 17, 2013, is now in trouble. In November 2015 the company said it would restate its financial statements over how the New York-based company classified some expenses and how it recognized revenue related to licensing agreements. This isn't even the first time he was subpoenaed over this, having been hit with the first one in November of past year, and after obtaining new council, didn't appear in court as required, and has not given any additional dates that he'd agree to testify.

U.S. District Judge Paul Gardephe ordered him to appear in court on Tuesday to show cause why he should not comply with an SEC subpoena ordering a May 11 appearance.

The SEC is investigating possible securities law violations by Iconix Brand Group, which markets apparel brands including Joe Boxer and London Fog.

The nature of the SEC inquiry is not yet known as it's under seal, and Jay-Z's rep wasn't immediately aware of the demand for Jay's testimony. The SEC said Iconix had maintained relationships with Carter related to the Rocawear brand, which it had written down by close to $203 million over the past two years. "Mr. Carter is a private citizen who should not be involved in this matter".

Simply asserting he does not have relevant information will likely not be enough for Carter to be allowed to ignore the subpoena, Chase said.

"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", the commission said. Shares for the company are down almost 7% in trade today after this news.

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