Jury deadlocked in trial of founder of Iconix after partial acquittal

  • Neil Cole cleared of two plot counts
  • Jurors deadlocked over fraud, other charges

(Reuters) – A Manhattan federal jury acquitted Iconix Brand Group Inc founder Neil Cole of two counts of conspiracy in his account fraud trial on Monday, but found itself in one in eight deadlock other charges, which resulted in the quashing of the trial.

A small group of Cole supporters quietly celebrated in court when he was found not guilty of conspiring to use joint venture agreements with Hong Kong-based global supply chain company Li & Fung Ltd to boost Iconix revenue in 2013 and 2014.

The jury also acquitted him of conspiring to obstruct an investigation by the United States Securities and Exchange Commission into the accounting treatment of the agreements by the clothing licensing company.

The jury returned hours later and said they could not reach unanimity on the remaining eight counts because “several jurors” were “strong in their beliefs” about the case.

U.S. District Judge Edgardo Ramos removed the jury from the jury, resulting in the case being quashed on these counts, including securities fraud, misrepresentation with the SEC, and undue influence on audits.

The Southern District of New York City attorney’s office may opt for a new trial for the charges. A spokesperson declined to comment on the verdict.

Cole’s lawyers did not immediately respond to requests for comment.

During the nearly month-long trial, Cole took the rare step of testifying in his own defense about deals that prosecutors said were bogus deals meant to inflate revenues by $ 13 million.

Iconix COO Seth Horowitz, who pleaded guilty to fraud and other charges in the case, testified against Cole at trial as part of a plea deal.

Iconix paid $ 5.5 million in 2019 to settle alleged accounting violations with the SEC, which the company has neither admitted nor denied.

Lancer Capital privatized Iconix in August.

The case is United States v. Cole, US District Court, Southern District of New York, # 19-cr-00869.

For Cole: Lorin Reisner, Richard Tarlowe and Andrew Reich from Paul, Weiss, Rifkind, Wharton & Garrison

For the government: Scott Hartman, Andrew Thomas and Noah Solowiejczyk from the Department of Justice

(NOTE: This story has been updated to reflect that the jury was deadlocked on the remaining counts and with the context of the case.)

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