The Securities and Exchange Commission (SEC) is seeking a court order for Jay-Z to appear in court and comply with SEC subpoena request to testify on his joint venture with Iconix Brand Inc.
Forbes Magazine (@forbes) reports, Iconix is being investigated by the SEC for potential securities law violations related to its financial reporting. Jay-Z and business partners established Rocawear in 1999 and sold it to Iconix in 2007 for over $200 million in intangible assets. Iconix reduced the value of the assets by $169 million in 2016, and by another $34 million in 2018, claiming the drop was due to “the decline in the demand for streetwear and urban clothing.” The SEC is seeking Jay-Z’s testimony on the deal to investigate inconsistencies in Iconix’s reporting. The SEC issued two subpoenas for his testimony. Jay-Z failed to appear both times. A hearing ordering Jay-Z to show cause for his refusal to comply is set for May 8th.
Jay-Z’s attorneys argue that he should not be involved in the case at all because he had nothing to do with Iconix’s financial reporting. If Jay-Z does not appear in court on May 8th, to successfully explain why he should not have to testify, he will likely be ordered to comply with the subpoenas and appear for testimony on May 11th. If the courts decide to go the extreme route, they can hold jay-Z in civil contempt, and have him locked up until he complies with the subpoenas or proves he is not acting in civil contempt. At the very least, it’s likely that Hov will be hit with some monetary sanctions for his non-compliance.