Jay-Z Subpoenaed By SEC For Testimony In Fraud Case

May 04, 2018, 09:42
Jay-Z Subpoenaed By SEC For Testimony In Fraud Case

The SEC asked the U.S. District Court for the Southern District of NY to force Carter to testify in the agency's probe of Iconix Brand Group, which acquired the rapper's Rocawear clothing brand in 2007.

But the SEC says Iconix's financial reporting around its Rocawear acquisition - and potentially other dealings - are suspicious. "The SEC takes its subpoenas very seriously, so you ignore them at your own peril", he said.

Jay-Z is the target of a subpoena regarding an ongoing Securities and Exchange Commission investigation. Reports claim he was originally subpoenaed in November 2017, and then again in February 2018, both times he reportedly "failed to appear as required". The SEC is now filing a subpoena enforcement action against Jay-Z for testimony to inquire about his joint venture with Iconix.

"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 statement reads.

The federal judge in the case, Paul Gardephe, ordered Carter to appear in a Manhattan court on Tuesday to explain why he should not be forced to talk to the SEC.

"Mr. Carter had no role in that reporting or Iconix' s other actions as a public company", the rep said.

The SEC is looking into potential violations of the federal securities laws that have to do with the company's financial reporting.

In 2007, Iconix Brand Group, a "brand management company" that licenses brands to retailers and manufacturers in the clothing and footwear industries, bought out Rocawear. If Carter does not comply with the subpoena, he may be held in contempt, according to the order.

The dates on which Jay-Z will appear in court to testify are unknown, as of Thursday afternoon.

A Iconix spokesperson could not be immediately reached for comment.

Iconix shares were down 6.7 percent at 59 cents in early afternoon trades Thursday.

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