Jay-Z ordered to testify next week in U.S. SEC investigation

[May 09, 2018]  By Brendan Pierson and Jonathan Stempel

NEW YORK (Reuters) - A federal judge in New York on Tuesday ordered Jay-Z to testify on May 15 in an investigation by the U.S. Securities and Exchange Commission involving the sale of the rapper's Rocawear clothing brand to Iconix Brand Group Inc.

At a hearing in Manhattan, U.S. District Judge Paul Gardephe said Jay-Z, whose real name is Shawn Carter, had failed to respond to SEC subpoenas served on him November and February, despite the regulatory agency's repeated efforts to schedule a time for him to testify.

"The testimony has been delayed for five months, and I do not intend to tolerate any further delay," Gardephe said.

Jay-Z was represented at the hearing by his lawyer, Alex Spiro, and did not appear himself. Spiro and lawyers for the SEC did not say where the testimony would take place.

The SEC filed a petition last week to enforce its subpoenas against Jay-Z.

Jay-Z sold Rocawear to Iconix in 2007 for about $204 million. The SEC has said it is looking into writedowns totaling this sum, $169 million in 2015 and $34.6 million in 2017, that Iconix took in connection with Rocawear.

The agency has said it wants to ask Jay-Z about his personal involvement with Rocawear and about transactions between his companies and Iconix.

Jay-Z said in a court filing on Monday that forcing him to testify at length would interfere with his preparations for an upcoming world tour, and that his testimony would not be relevant.

Gardephe disagreed, saying at Tuesday's hearing that the agency had a "legitimate purpose" in seeking to interview Jay-Z.

In Monday's filing, Jay-Z asked the judge to limit his testimony to a single day. The SEC said it opposed any time limit.

Gardephe said Tuesday he would not impose a time limit, saying that could be an incentive "run out the clock." However, he said he expected the testimony could be finished in a day, and that the SEC must ask him for permission to go beyond that.

Spiro said after the hearing that he was "pleased" with the outcome.

Jay-Z, 48, is famous for songs including "Hard Knock Life," "99 Problems" and "Big Pimpin.'"

The Brooklyn native has won 21 Grammy Awards, most recently in 2015 for Best R&B song and Best R&B performance for “Drunk in Love” with his wife, pop star Beyonce.

His most recent album, "4:44," was nominated for eight Grammys but did not win any.

(Reporting by Jonathan Stempel and Brendan Pierson; editing by Meredith Mazzilli and Jonathan Oatis)

[© 2017 Thomson Reuters. All rights reserved.]

Copyright 2017 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.