SEC Charges Sequential Brands Group Inc. with Deceiving Investors by Failing to Timely Impair Goodwill

The Securities and Exchange Commission today charged New York-based brand-management company Sequential Brands Group Inc. with failing to impair its goodwill as required by accounting principles and the federal securities laws. The SEC's complaint alleges that Sequential failed to properly assess its goodwill for potential impairment after several months of declining stock prices followed by a precipitous drop in early November 2016. According to the complaint, in December 2016, shortly after Sequential passed its annual goodwill testing, the company conducted internal calculations showing that, in light of the declining stock price, Sequential would fail the first step of its disclosed two-step impairment test.