Monster Facing AG Investigation — and Beasties

Energy drink juggernaut Monster Energy revealed yesterday that it is facing a subpoena from an unnamed state attorney general concerning the brand — and also received notice it was being sued by a well-known rap group.

In a disclosure in its quarterly report filed late Thursday, the company said it was being investigated “concerning the Company’s advertising, marketing, promotion, ingredients, usage and sale of its Monster Energy brand of energy drinks.”

License to Sue? Beastie Boys Take on Monster


The subpoena that triggered the revelation was sent by the attorney general in July, but Monster did not indicate the particular incident that triggered the subpoena, nor did it speculate about its potential impact.

“As the investigation is in an early stage, it is unknown what, if any, action the state attorney general may take against the Company, the relief which may be sought in the event of any such proceeding or whether such proceeding could have a material adverse effect n the Company’s business,” according to the filing.

The filing came on the heels of a disappointing earnings call earlier that afternoon, when investors who have showed strong faith in the company’s growing earnings were shaken by news that Monster was having difficulties building the brand overseas, particularly in Korea, where the company delayed its launch. Monster shares plunged more than 9 percent over the course of the trading day after a run-up of nearly 50 percent over the previous six months.

Meanwhile, another claim against the company has surfaced in an entirely different, although no less high-profile venue. Rap group the Beastie Boys filed suit against the company, claiming that Monster had infringed on their copyrights by posting a 23-minute video synchronized to many of the group’s well-known songs to promote its Ruckus in the Rockies 2012 event.