Judge orders Jay-Z to testify in SEC probe

Ismael LynchMay 09, 2018

The SEC wants Jay to testify in their investigation into the $200 million sale of his Rocawear clothing line to Iconix Brand Group in 2007, and whether Iconix violated securities laws.

Jay-Z is concerned that the SEC's request is "driven more by governmental fascination with celebrity and headlines than by any proper investigative objective", the lawyers wrote Monday in a submission at Manhattan federal court.

Jay-Z's lawyers say their client has been cooperative with the SEC's investigation, but have sought to do so without imposing undue burdens on him.

Jay-Z, whose birth name is Shawn Carter, must appear before the SEC in Washington on Friday for a deposition of unlimited duration unless he can explain why it should not be required, U.S. District Judge Paul G. Gardelphe wrote last week.

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

In a declaration filed in Manhattan federal court, Jay-Z's lawyers stated that the SEC is on a "celebrity hunt", and that the request is "driven more by governmental fascination with celebrity and headlines than by any proper investigative goal".

By requiring open-ended questioning, the SEC is placing unreasonable and burdensome demands on Jay-Z as the prepares for a 45-date global concert tour of his 4:44 album, attorney Alex Spiro said in a Monday court filing. The judge said he had presided over other litigation involving Iconix and concluded there was "ample basis" for the SEC to be investigating the company's finances, especially after the company twice had to restate earnings for 2013 and 2014.

Jay-Z opposes the SEC's demand based on his concern that open-ended, in-person testimony "is driven more by governmental fascination with celebrity and headlines than by any proper investigative objective, the attorney wrote". But the judge noted that both sides agreed it likely would take no more than a day and he would not set a time limit because that sometimes leads witnesses to "run out the clock". Outside court, Spiro said he was pleased with the hearing's outcome.

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