SEC Asks Federal Court to Compel Jay-Z to Testify
Regulators want to talk to the rapper about Iconix, the company he sold his clothing line Rocawear to in 2007.
May 03, 2018 at 01:53 PM
2 minute read
Is it over for H.O.V.A.?
The U.S. Securities and Exchange Commission is asking a Manhattan federal judge to enforce a subpoena issued to Shawn Carter, better known by his stage name Jay-Z (and who frequently name-checks himself as “H.O.V.A.” on stage), to testify before the commission in an investigation into a company he sold a clothing line to a decade ago.
In an ordered issued Thursday, U.S. District Judge Paul Gardephe of the Southern District of New York said Carter must appear before him on May 8 to answer why he should not be compelled to appear before the commission.
The SEC says regulators are looking into the $200 million purchase of Carter's Rocawear by Iconix, a major fashion brand company, in 2007. At the time, it was the largest deal the company had ever made.
Since March 2016, Iconix has reported it has had to write down $204 million on Rocawear. Iconix sued Carter last year, claiming a copyright infringement over his continued use of his Roc Nation brand to sell clothing products, now under the name Paper Plane. Last month, that litigation moved to mediation, and is scheduled for a May 14 conference between the parties.
In the SEC's action, regulators say they want to talk to Carter about the joint venture with Iconix. A subpoena was initially issued by the SEC in November 2016. A second one was issued in February after Carter retained new counsel. Regulators say he has not appeared, and, through counsel, declined to provide additional information about when he might.
An SEC spokesman declined to comment beyond the commission's notice of the action in the Southern District.
In a statement, a representative of Carter's said he was aware the SEC was probing Iconix's financial reporting, but since he had “no role in that reporting or Iconix's other actions as a public company” he should “not be involved in this matter.”
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