A federal judge has ordered music mogul, 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.
According to CNN, Carter must appear in a Manhattan courtroom 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.