NEW YORKJay-Z has been told to appear in court next week in connection with aSecurities and Exchange Commission investigation of a brand management company he’s been involved with inpartnerships.
U.S.District Court Judge Paul Gardephe directed Shawn Carter Jay-Z’s birth name to attend a May 8 hearing on the SEC’s stalled effort to have therapper and businessman testify about potential securities law violations by New York-based Iconix Brand Group.
Shares of Iconix (ICON) closed down 7.5%at 59 cents.
Iconixpaid Jay-Z more than $200 million to acquire intangibleassets associated with his Rocawear apparel brand, the SEC said in a Thursday announcement. After the 2007 acquisition, Jay-Z and Iconix maintained publicly-disclosed partnerships related to Rocawear, the Wall Street regulator said.
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In March 2016, Iconix publicly announced a $169 million write-downofRocawear’s value, and then disclosed an additional $34 million write-down of the brand in March, the SEC said.
Investigators want Jay-Z to testify about his joint ventures with Iconix. The SECinitially subpoenaed him on Nov. 16, and issued a second subpoena on Feb. 23, after he retained a new attorney.
Jay-Z “failed to appear as required by the subpoenas and, through his counsel … has declined to provide any additional dates on which he will agree to appear for investigative testimony,” the SEC said.
A subpoena enforcement action is commonly used when the information sought from a witness is deemed relevant to a legal investigation.
The SEC said the application “does not reflect a determination” that Jay-Z “has violated provisions of the federal securities laws at issue in the investigation.”
The legal representative listed for Jay-Z in the federal court record ofthe matter said his clientwas aware that the SEC has sought information about Iconix’s financial reporting.
“Mr. Carter had no role in that reporting or Iconixs other actions as a public company. Mr. Carter is a private citizen who should not be involved in this matter,” said the representative, who did not answer a questionabout whether Jay-Z would appear in court as directed.
Nonetheless, Jay-Z rapped a less-than-enthusiastic view of some legal proceedings in People’sCourt, which includes the lyrics: “When you’re warring with me, it’s People’s Court, we hold court in the street.”
Iconix did not immediately respond to a request seeking comment on the SEC investigation.
However, the company previously disclosed some details of the investigation in its SEC filings.”We were engaged in a comment letter process with the SEC Staff and undertook an internal review of our financial statements, which resulted in our Board, Audit Committee and current management restating certain of our historical financials,” Iconix said in its annual report filed on March 14.
“In addition, we have received a formal order of investigation from the SEC. Restatements of financial statements and results of the SEC’s investigation has had and could continue to have a negative effect on our business and stock price,” added Iconix.
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc