Iconix Brand Group, Inc.

Robbins Arroyo LLP: Iconix Brand Group, Inc. (ICON) Misled Shareholders According to a Recently Filed Class Action

Robbins Arroyo LLP announces that a federal securities fraud class action complaint was filed in the U.S. District Court for the Southern District of New York. The complaint alleges that officers and directors of Iconix Brand Group, Inc. (NASDAQ: ICON) violated the Securities Exchange Act of 1934 between February 20, 2013 and April 17, 2015, by making materially false and misleading statements about Iconix’s business prospects. Iconix is a brand management company that owns, licenses, and markets a diverse portfolio of consumer brands in the United States and internationally.

Iconix Engages In Irregular Accounting Practices

Iconix purchases licensing rights to consumer fashion brands for a fixed acquisition cost and licenses the right to use the brands in exchange for licensing fees. According to the complaint, in accounting for its gains on these licensing fees, Iconix failed to properly account for the acquisition cost of the underlying intellectual property licensing rights.

Iconix officials expressed to investors that free-cash flow was an integral part of the company’s business model and that this model proved to be successful for Iconix. However, the complaint alleges that Iconix engaged in irregular accounting practices related to the booking of its joint venture and profits, free cash flow, and organic growth, and as a result, its earnings and revenues were overstated. These misstatements created an unrealistically positive assessment of Iconix and its business, and caused the price of the company’s securities to be artificially inflated.

On March 30, 2015, the company announced that its Chief Financial Officer had resigned. On this news, the company’s stock fell $2.72 per share, or 7%, to close at $33.67 per share on March 31, 2015. Then, on April 17, 2015, Iconix announced that its Chief Operating Officer had resigned. On April 20, 2015, Roth Capital Partners published an Equity Research Note that revealed Iconix’s accounting irregularities and uncertainties surrounding the company’s prior reporting of free cash flow and practice of booking joint venture gains as revenue. On this news, shares of Iconix declined an additional $6.62 per share, over 20%, to close at $25.41 per share on April 20, 2015.

Iconix Shareholders Have Legal Options

Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.

 

Shareholder Information

Items marked with an asterisk (*) are required information.

First Name * Last Name *
Address City State/Province *
ZIP/Postal Code Country/Region Phone *
E-mail * Confirm: E-mail *

Shares Purchased:
Number of Shares: Buy Date : Price Per Share:
example: 125 example: MM/DD/YYYY example: 30.00
transaction:
transaction:
transaction:
transaction:
transaction:
If you have additional transactions or comments, please input the information below:

Shares Sold:
Number of Shares: Sell Date : Price Per Share:
example: 125 example: MM/DD/YYYY example: 30.00
transaction:
transaction:
transaction:
transaction:
transaction:
If you have additional transactions or comments, please input the information below:

Please Note: Neither the submission to nor the receipt of information by Robbins Arroyo LLP or one of its attorneys through this website constitutes an agreement by our firm to represent the individual and does not create an attorney-client relationship. Please do not send confidential or sensitive information through this website. This information should be communicated through a direct contact with an individual at the firm.

* I have read the disclaimer information
+=

    Send This Post

    Tags: