The SEC is examining potential violations of federal securities laws related to Iconix's acquisition of intangible assets associated with Jay-Z's Rocawear apparel brand, according to the SEC's statement about the subpoena.
The Wall Street regulator filed the action against Shawn Carter, known artistically as Jay-Z, in federal court in the Southern District of NY as part of an ongoing case investigating the financial reporting of New York-based Iconix Brand Group.
Jay-Z has been subpoenaed twice in the case and has ignored both subpoenas. At the time of the deal, Jay-Z and Iconix said they would form a separate joint venture that would identify new brands to acquire.
The Securities and Exchange Commission said today that it is seeking a court order for Jay-Z to testify in an investigation into Iconix Brand Group., according to CNBC.
The SEC initially issued a subpoena for Carter's testimony in November.More news: Superior seeks 'return to normal' following refinery fire
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Among other things, the SEC said it desires jayz to reveal exactly the worth of their Rocawear trade mark along with also his engagement with all the brand to Iconix after the sale.
In 2016, Iconix publicly announced a $169 million write-down of Rocawear (a "write-down" being a reduction in its estimated value), followed by another write-down of $34 million in March of this year.
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. "Mr. Carter had no role in that reporting or Iconix's other actions as a public company". He has, so far, failed to provide the SEC with any dates as to when or how he might testify - and now, it seems the federal agency is getting impatient with the rapper.
Now, the SEC if fighting back.
Carter sold Rocawear to Iconix for $204 million in 2007, but maintained significant creative control of the brand. Iconix has faced a series of troubles in recent years, including slipping sales and a number of high-profile executive departures. Shares for the company are down almost 7% in trade today after this news.