Jay-Z ordered to answer Securities and Exchange Commission questions in financial inquiry

Associated Press | AP Business

Show Caption Hide Caption Music industry hails Jay-Z before Grammys The music industry hails Jay-Z the night before the Grammy Awards.

NEW YORK — Jay-Z’s busy schedule as he prepares for a global tour of his 4:44 album got busier Tuesday when a federal judge said he must spend at least a day answering questions from Securities and Exchange Commission investigators.

Manhattan U.S. District Judge Paul Gardephe didn’t let lawyers do more than introduce their names into the court record before he ruled that the singer whose birth name is Shawn Carter must answer the SEC’s questions for a full day and maybe more.

The questioning stems from the Wall Street regulator's investigation of Iconix Brand Group, the New York-based company that acquired assets of the famed rapper and entrepreneur's Rocawear apparel business in 2007.

Lawyers for the SEC and Jay-Z settled on May 15 for a deposition that will take place at an undisclosed location at the rapper's request.

Jay-Z did not appear at the court hearing, disappointing some spectators who came to lower Manhattan courthouse hoping to see him.

Before ordering the deposition, Gardephe described details of the SEC investigation into the finances of the Iconix Brand Group and how they relate to the Rocawear apparel brand.

He said Jay-Z’s testimony had been delayed five months as the singer fought the SEC’s request, beginning in January when his lawyer responded to a November subpoena for Jay-Z to be questioned in January by saying he could be interviewed by telephone.

After a second subpoena in February called for a March deposition, Jay-Z’s lawyer offered to have his client submit to questions for two hours, the judge said. The lawyer later offered to expand the questioning to four hours, but criticized the SEC’s plans to question Jay-Z.

Gardephe offered a mild rebuke Tuesday of Jay-Z’s lawyer, Alex Spiro, who in a Monday court filing said the investigation might be a "celebrity hunt." The judge said it wasn’t Spiro's place to decide what areas the SEC had a right to explore through its questioning.

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 brand management firm twice had to restate earnings for 2013 and 2014.

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Although Spiro offered a spirited argument in court papers Monday for his client’s busy schedule making it hard to spare more than a day for a deposition, he did not protest the judge’s order Tuesday, even when Gardephe said he might order the questioning to extend past a day if it became necessary.

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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.”

Referring to Jay-Z only as “respondent,” Gardephe said one-day of questioning would allow Jay-Z to “go on about his business.”

"We are pleased with the decision," Spiro said in a statement issued after the ruling.