Case under investigation
Iconix Brand Group, Inc. (ICON: NASDAQ)
On June 23, 2015, a securities fraud action was filed against Iconix Brand Group, Inc. (“Iconix” or the “Company”) (ICON) and certain of its officers, for securities fraud (the “Securities Action”). The Securities Action alleges that defendants disseminated materially false and misleading statements, thereby inflating the price of the Company’s shares, during the period of February 20, 2013 and April 17, 2015 (the “Class Period”).
Iconix is a brand management company and owner of a diversified portfolio of global consumer brands across women’s, men’s, entertainment and home. The Securities Action alleges that throughout the Class Period defendants made false and/or misleading statements and/or failed to disclose to investors that: (1) that the Company had underreported the cost basis of its brands; (2) that the Company engaged in irregular accounting practices related to the booking of its joint venture revenues and profits, free-cash flow, and organic growth; (3) that, as a result, the Company’s earnings and revenues were overstated; and (4) that, as a result of the foregoing, Defendants’ statements about Iconix’s business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.
On March 30, 2015, the Company announced that its Chief Financial Officer had resigned effective March 30, 2015. The next day, shares of Iconix fell $2.72 per share, or 7%, closing at $33.67 per share on unusually high volume. Then, on April 17, 2015, Iconix announced that the Company’s Chief Operating Officer had resigned after serving for approximately one year. The Company stated that it did not intend to name a new COO. Three days later, Roth Capital Partners, published an Equity Research Note, criticizing the Company’s alleged accounting irregularities concerning free-cash flow accounting, organic growth, and gains on licensing fees. Following this news, shares of Iconix declined $6.62 per share, over 20%, to close on April 20, 2015, at $25.41 per share, on unusually heavy volume.
TheGrantLawFirm is presently investigating whether the Board has breached its fiduciary obligations and/or whether the Company continues to commit securities fraud.
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