A federal judge has ordered Shawn Carter, better known as Jay-Z, to explain why he shouldn’t have to testify in an SEC probe into Iconix, the company that now owns the Rocawear clothing brand he co-founded.
Carter must appear in a Manhattan court room on May 8 to make his case, according to a court document made public Thursday.
The SEC said it asked a federal judge to step in after Carter ignored two subpoenas requesting his testimony.
Carter is not the focus of the SEC probe. Rather, the agency is focused on Iconix, a brand management company that owns labels including Candie’s, London Fog and Rampage.
Carter and business partner Damon “Dame” Dash sold the rights to their urban apparel line Rocawear to Iconix in 2007 for $204 million. The SEC says Carter and Iconix “maintained publicly-disclosed partnerships related to the Rocawear brand” after the sale.
Regulators are investigating “potential violations” of federal financial disclosure laws by Iconix, the SEC said in a statement. As part of that probe, the investigators issued Carter a subpoena seeking his testimony in November 2017 — but he never showed up. It issued a second subpoena in February that Carter also ignored.
The SEC said Thursday that its efforts to force Carter to testify in the probe do “not reflect a determination by the SEC” that he violated federal law, the agency said.
When reached for comment, a representative for Carter issued a statement saying they “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,” the statement reads. It’s unclear if he plans to appear in court next week. The representative was not immediately available to answer additional questions.
If Carter fails to show up in court, he could be found in contempt, according to a court filing. And if he fails to convince the judge that he should not have to testify in the SEC probe, he could be forced to give his testimony on May 11.
Iconix did not respond to a request for comment Thursday.
The SEC said in its statement Thursday that Iconix had to write down the value of its Rocawear purchase after the fact. That indicates Iconix overvalued the asset.
“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 statement reads.
Further details about the probe or Iconix’s association with Carter were not immediately available.
Carter, who married 22-time Grammy award winner Beyoncé in 2008, is worth an estimated $810 million, according to Forbes.
In 1996, Carter formed Roc-A-Fella Records with friends Dash and Kareem “Biggs” Burke specifically to market the rapper’s music.
Carter and his partners sold Roc-A-Fella to Island Def Jam, and he was appointed to a new role as president and CEO of Def Jam Recordings in 2004.
In 2008, the rapper founded the entertainment company Roc Nation, which includes a record label that is home to artists like Drake and Rihanna.
Carter also once owned a small part (0.15%) of the New Jersey Nets, and helped make them the Brooklyn Nets. He sold his stake to Jason Kidd and an unidentified investor in 2013.
That same year, Carter formed Roc Nation Sports, which manages professional athletes.
He also co-owns the 40/40 Club sports-bar chain, and is an investor in several other restaurants, including New York hotspot The Spotted Pig.
Source: eDaily Entertainment