A federal judge has ordered Shawn Carter popularly know 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.
The Securities and Exchange Commission (SEC) subpoenaed Jay-Z on Thursday, ordering him to testify in court about the accounting practices of Iconix Brand Group Inc.
Iconix bought Jay-Z’s Rocawear brand in 2007 for $200 million; the SEC has been investigating Iconix since 2015 for allegedly violating federal securities law.
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.
Jay Z must now appear in a Manhattan court room on May 8th to make his case, according to a court document made public on Thursday. The SEC (Securities and Exchange Commission) said it asked a federal judge to step in after Carter ignored two subpoenas requesting his testimony.
Jay Z failed to appear as required and, through his counsel has declined to provide any additional dates on which he will agree to appear,” the SEC told U.S. Judge Paul Gardephe. The SEC added that their interest in Jay-Z’s testimony “does not reflect a determination” that he “has violated provisions of the federal securities laws at issue in the investigation,” .
The hip hop artist representative said,Jay Z 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.
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.
If Jay Z 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.