Iconix Settles Lawsuits, SEC Investigation
Iconix Brand Group agreed to pay $11.5 million to settle long-running shareholder lawsuits($6 million) and an SEC investigation ($5.5 million). It also sold Rocawear IP back to Jay-Z’s Roc Nation Holdings along with membership in his Marcy Media Holdings, for $15 million to resolve a third suit.
The agreements effectively settle the major lawsuits and investigations that followed the departure of former CEO Neil Cole in 2015.
The settlement with Jay-Z settles lawsuits Iconix and the singer filed against each other. In 2017, Iconix alleged Jay-Z violated Rocawear trademarks by launching baseball caps with New Era. (Iconix purchased the Rocawear brand from Jay-Z for $204 million in 2007.) Earlier this year, Jay-Z sued Iconix, accusing it of fraudulently doing business with Roc Nation as part of a “colossal accounting scandal.”
The SEC also had sought Jay-Z’s testimony in connection with a $169 million write-down Iconix had taken for Rocawear brand.
The three-year-old SEC investigation, which was joined by the U.S. Attorney’s Office New York in December, looked into Iconix’s accounting treatment for international joint ventures. Iconix revised financial statements for the fiscal years 2013 and 2014 and the first two quarters of 2015.
The three shareholder suits, filed in U.S. District Court, New York in 2015, accused Iconix of breaching its fiduciary duty and insider trading.