* Court says conviction based on theory a jury rejected * Cole was accused of inflating revenue, earnings * U.S. Attorney in Manhattan had no comment By Jonathan Stempel NEW YORK, Oct 27 (Reuters) - A federal appeals court in Manhattan on Monday overturned the conviction of Neil Cole, the founder and former chief executive of Iconix Brand Group, for defrauding investors about the apparel licensing company's revenue and earnings. The 2nd U.S. Circuit Court of Appeals said Cole's conviction on eight charges and 18-month prison term violated his right against being tried twice for the same crime, known as double jeopardy, under the U.S. Constitution's Fifth Amendment. A three-judge panel said Cole's November 2022 conviction in a retrial was based on a theory a different jury rejected in October 2021, when it acquitted him of conspiracy and deadlocked on other charges. The court ordered the indictment dismissed. Iconix is based in Manhattan. Its portfolio includes such brands as Candie's, Danskin, Fieldcrest, Joe Boxer, London Fog, Marc Ecko, Pony, and Rocawear, created by rapper Jay-Z. Cole was accused of orchestrating a series of "round trip" transactions where a unit of Hong Kong apparel licensing company Li & Fung overpaid for various assets, with an understanding it would be reimbursed for the overpayments. Prosecutors said Cole inflated Iconix's results in 2014 by reporting only the inflated purchase prices to investors. In Monday's decision, Circuit Judge Susan Carney said the original conspiracy acquittal meant the first jury must have doubted that Cole verbally engineered fraudulent "overpayments-for-givebacks" agreements. "Evidence of his participation in those agreements was indisputably essential to Cole's convictions" on the other charges, Carney wrote. "Accordingly, the Double Jeopardy Clause barred Cole's retrial." The office of U.S. Attorney Jay Clayton in Manhattan had no comment, sending an autoreply email citing the government shutdown. In a statement, Cole said he felt vindicated, and was confident Iconix's brand management business could be reinvented. Iconix paid $5.5 million in 2019 to settle U.S. Securities and Exchange Commission accounting charges, without admitting wrongdoing. Lancer Capital took Iconix private in 2021. The case is U.S. v. Cole, 2nd U.S. Circuit Court of Appeals, No. 23-7566. (Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot) (The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
