Neil Cole, the founder and former CEO of Iconix Brand Group Inc., has been convicted on charges related to misrepresenting the company’s revenue. The guilty verdict comes a year after Cole was acquitted on two charges of conspiracy, after which the SEC decided to re-try the remaining charges.
A Manhattan jury found Cole guilty of the other charges on Monday, according to a Law360 report.
In a statement Cole’s counsel Sean Hecker of Kaplan Hecker & Fink LLP and David Oscar Markus of Markus/Moss PLLC said they were “disappointed” in the verdict, especially given the first jury’s decision to acquit on two charges.
“We will continue to fight and believe there are significant issues for the appeal,” the lawyers said.
Cole was arrested by federal prosecutors in 2019 and charged with exaggerating revenue and earnings for Iconix. The company’s former COO Seth Horowitz was also named in a separate charge. The allegations pertaining to both former executives were related to fraud, as per federal prosecutors.
According to allegations, Cole and Horowitz “devised a fraudulent scheme to create fictitious revenue” and misrepresented the company’s net income by hundreds of millions of dollars between 2013 and Q3 of 2015. This allowed the company to meet or meet or beat Wall Street analysts’ consensus estimates in the Q2 and Q3 of 2014.
Iconix licenses brands to leading retailers and manufacturers around the world. The company owns Starter, Candie’s, London Fog, Umbro, Zoo York, Ocean Pacific and other brands. Last year, Lancer took the company private in an all-cash deal for $3.15 a share, which totals $585 million including debt.
The SEC began investigating Iconix in 2015. Cole served as founder, chairman & CEO of the company until his resignation in August of that year. Horowitz had resigned in April 2015 just two weeks after CFO Jeff Lupinacci exited in March.
Horowitz previously pled guilty to the charges. Cole has maintained that he acted in good faith while at Iconix. In a June 17 post to Medium, Cole said the “case should never have been brought” and said he looked forward to clearing his name.