A federal jury in Manhattan acquitted Iconix Brand Group Inc founder Neil Cole on two counts of conspiracy at his accounting fraud trial on Monday, before being ordered to try to overcome an impasse on eight other counts.
Near the end of the nearly month-long trial, Cole took the rare step of testifying in his own defense about the transactions which prosecutors said were sham deals meant to inflate the apparel licensing company’s revenue by $13 million.
A small group of Cole’s 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 inflate revenue in 2013 and 2014.
The jury also acquitted him of conspiring to obstruct a U.S. Securities and Exchange Commission inquiry into Iconix’s accounting treatment of the agreements.
U.S. District Judge Edgardo Ramos urged jurors on Monday afternoon to continue deliberating on eight counts, including securities fraud, making false filings with the SEC and improperly influencing audits.
Iconix paid $5.5 million in 2019 to settle with the SEC over alleged accounting violations, which the company neither admitted nor denied.
Lancer Capital took Iconix private in August.
The case is United States v. Cole, U.S. District Court, Southern District of New York, No. 19-cr-00869.
For Cole: Lorin Reisner, Richard Tarlowe and Andrew Reich of Paul, Weiss, Rifkind, Wharton & Garrison
For the government: Scott Hartman, Andrew Thomas and Noah Solowiejczyk of the Department of Justice
