Friday, August 21, 2015
Labaton Sucharow Files Class Action Lawsuit on Behalf of Investors in Iconix Brand Group, Inc. (ICON)NEW YORK (August 21, 2015) — Labaton Sucharow LLP filed a securities class action lawsuit today in the U.S. District Court for the Southern District of New York. The lawsuit was filed on behalf of all persons or entities who, between February 20, 2013 and August 7, 2015, inclusive (the class period), purchased or otherwise acquired the publicly traded securities of Iconix Brand Group, Inc. (Iconix) (NASDAQ: ICON).
Iconix is a brand management company and owner of a diversified portfolio of global consumer brands across fashion, sports, entertainment, and home segments. The company’s business strategy is to maximize the value of its brands primarily through strategic licenses and joint venture partnerships around the world, as well as to grow the portfolio of brands through strategic acquisitions. Iconix purchases the licensing rights to an existing consumer fashion brand for a fixed acquisition cost (or cost basis), and licenses the right to use the brand through a series of agreements with various partners and joint ventures in exchange for licensing fees.
The complaint charges Iconix and certain of its officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission (SEC) Rule 10b-5 promulgated thereunder. The complaint alleges that certain defendants made false and misleading statements and concealed material information relating to the company’s accounting practices. Specifically, the defendants caused securities issued by Iconix to trade at artificially inflated prices by underreporting the cost basis of certain licensing rights acquisitions and engaging in irregular accounting practices related to the booking of its joint venture revenues and profits, free-cash flow, and organic growth.
The complaint alleges that the true state of the company’s questionable accounting practices was revealed through a series of partial disclosures and conspicuously timed executive resignations, culminating with the August 10, 2015 announcement that the SEC was reviewing the company’s “accounting treatment for the formation of the company’s international joint ventures under U.S. Generally Accepted Accounting Principles and whether such joint ventures should potentially have been consolidated in the company’s historical results.” Iconix warned that it may ultimately be forced to reverse certain gains it had recognized on its historical joint venture transactions and that the specific amounts that could be reversed as a result of improper accounting were estimated to be $46.5 million in 2014, $24.6 million in 2013, and $5.6 million in 2012. As the market reacted to these disclosures, the price of Iconix’s shares fell dramatically, declining more than 67 percent per share from its class period high closing price.
If you purchased or acquired publicly traded ICON securities during the class period, you are a member of the “class” and may be able to seek appointment as lead plaintiff. Lead plaintiff motion papers must be filed with the U.S. District Court for the Southern District of New York no later than August 24, 2015. A lead plaintiff is a court-appointed representative for absent members of the class. You do not need to seek appointment as lead plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as lead plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow, at (800) 321-0476, or via email at firstname.lastname@example.org. You can view a copy of the complaint here.