NEW YORK (CNNfn) - Women's shoe designer Steve Madden, arrested Tuesday on charges of securities fraud, will step down as chairman of Steve Madden Ltd., but will remain as the company's chief executive officer, the company said Wednesday.|
The New York-based company's board of directors met Wednesday to review the charges against Madden and decided unanimously that he should remain as CEO, the company said in a press release. The board appointed outside director Charles Koppelman to succeed Madden as chairman.
Koppelman is also the chairman and CEO of entertainment-financing company CAK Entertainment, and he served as chairman and CEO of EMI Capital Music from 1988 to 1997.
Company officials could not be reached for additional comment Wednesday afternoon.
The U.S. Securities & Exchange Commission on Tuesday charged Madden with helping to manipulate 22 initial public offerings, including his own firm's 1993 IPO. Nasdaq halted trading in the company's stock at 10:59 a.m. ET Tuesday, freezing shares at 11-3/16. Trading will remain frozen until the company has fully satisfied Nasdaq request for additional information, a Nasdaq press release issued Tuesday said.
Madden's lawyer, Joel Winograd, "vigorously" denied the charges against his client on Tuesday and said the principals of two brokerage houses, said to be Madden's accomplices in the alleged fraud, were using Madden as a "passport to freedom."
Madden faces 10 years in prison on each fraud charge, five years on conspiracy charges, and 20 years on a money laundering conspiracy charge, plus fines in excess of $8 million, if convicted on all counts.
The SEC has also said it intends to bar Madden from serving as a director or public officer of any company in the future.
Steven Madden Ltd. is a designer of women's footwear sold in the company's own retail stores, as well as in specialty shops and department stores. Madden also owns and runs a retail store under its David Aaron brand and is the licensee for l.e.i. Footwear and Jordache Footwear.