The Securities and Exchange Commission has filed a lawsuit trying to compel Jay-Z to testify about an apparel deal that soured.
In federal court in the Southern District of New York, the SEC filed to force Shawn Carter to testify about his ventures with Iconix Brand Group ICON, -7.76%
Iconix paid the now-husband of Beyonce more than $200 million in 2007 to acquire intangible assets associated with Carter’s Rocawear apparel brand. Yet in March 2016 Iconix took a $169 million write-down, and then in March 2018, an additional $34 million write-down.
In the 2018 filing, Iconix said “given the decline in the demand for streetwear and urban clothing, the company’s licensees have been unable to increase sales of Rocawear products.”
Rocawear was established in 1999 by Carter and his partners, according to Iconix, before the company acquired it in 2007. The SEC said Carter and Iconix maintained publicly disclosed partnerships related to the Rocawear brand after the acquisition.
Shares of Icon dropped 6% on Thursday to roughly 60 cents, and it’s collapsed 91% over the last year.
The SEC said it’s twice tried to get Carter to testify, first in November and then after he retained new counsel. The agency said not only has Carter failed to appear, but he hasn’t offered any additional dates on which he’ll agree to appear.
Carter’s attorney, in an email to MarketWatch, said he shouldn’t be involved.
“We are aware that the SEC is seeking information on Iconix’ s financial reporting. Mr. Carter had no role in that reporting or Iconix’ s other actions as a public company. Mr. Carter is a private citizen who should not be involved in this matter,” said Alex Spiro, partner at Quinn Emanuel Urquhart & Sullivan.
The SEC said the application does not reflect a determination by the SEC or its staff that Carter has violated provisions of the federal securities laws. Source: Market watch