WASHINGTON (Reuters) - Music mogul and businessman Jay-Z must explain details of the sale of his clothing line to determine whether it violated federal securities laws, the U.S. Securities and Exchange Commission (SEC) said on Thursday.
The SEC said it wants to question Jay-Z, originally named Shawn Corey Carter, about the $200 million sale of his Rocawear clothing label in 2007 to the Iconix Brand Group, Inc.
“The Commission seeks Carter’s testimony to inquire about, among other things, Carter’s joint ventures with Iconix,” the SEC said, adding that it had questions about whether federal securities laws were breached.
Hours later, a Scandinavian law firm and a financial institution filed a lawsuit against the rapper over fees incurred during the purchase of Tidal, a digital music service he co-owns with his wife Beyonce and two other star singers, Rihanna and Madonna.
The lawsuit claims that Jay-Z’s parent company, S. Carter Enterprises, hired the firms in 2015 to assist in the purchase of the subscription service’s owner, the Swedish company Aspiro AB.
A balance of $598,383.00 is still outstanding after he made a partial payment.
“We 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,” a representative for Jay-Z said in a statement to CNBC.
“Mr. Carter is private citizen who should not be involved in this matter,” the statement said.
In November, the rapper failed to appear after an initial SEC order. In February, the SEC issued a second subpoena for his testimony. He declined to appear or provide any dates on which he would be available, the SEC statement said.
Jay-Z continued as chief creative officer of the Rocawear brand after the 2007 sale. Iconix also entered a separate joint venture with the rapper as part of the sale to identify brands to be acquired or developed.
(This story corrects typographical error in headline.)
Reporting by Katanga Johnson; Editing by Tom Brown and David Gregorio
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