Iconix Brand Group, Inc.
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 Complaint alleges that 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 14, 2016, the Honorable Paul G. Gardephe issued an order appointing the City of Atlanta Police Officers’ Pension Fund and the City of Atlanta Firefighters’ Pension Fund as Lead Plaintiffs and appointing Saxena White as Co-Lead Counsel.
Lead Plaintiffs filed the Consolidated Amended Complaint on May 13, 2016. On July 27, 2016, Defendants filed their motion to dismiss the Amended Complaint. Lead Plaintiffs’ opposition to Defendants’ motion to dismiss was filed on September 27, 2016, and Defendants’ reply was filed on October 27, 2016. On October 25, 2017, the Honorable Judge Gardephe granted Defendants’ motion to dismiss, concluding that Plaintiffs had not sufficiently alleged scienter. However, the Court granted Plaintiffs leave to file a second amended complaint.
On November 14, 2017, Lead Plaintiffs filed their Second Amended Complaint adding BDO USA, LLP (“BDO”), Iconix’s auditor during the Class Period, as a defendant. The Second Amended Complaint alleges that BDO intentionally ignored multiple red flags showing that Iconix engaged in numerous accounting improprieties in connection with its creation of sham joint ventures. Defendants and BDO filed their motions to dismiss the Second Amended Complaint on February 2, 2018, Plaintiffs filed their opposition to the motions on March 30, 2018, and Defendants and BDO filed their replies in further support of their motions to dismiss on April 27, 2018. Defendants’ motions remain pending before the Court.