When the iconic U.S. fashion company American Apparel publicly suspended its founding CEO amid persistent allegations of misconduct, FTI Consulting was engaged by the independent board of directors and legal counsel Jones Day to conduct a thorough, firm-wide forensic investigation into the allegations.
Less than 12 hours after being selected, FTI Consulting had experts on-site and rapidly assembled a team of more than 60 forensic accounting, technology and corporate finance experts. Over an intense three-month period, our team worked under intense media scrutiny from every major news outlet across the globe. The company presented its findings to the board and to various governmental agencies, supporting the board’s decision to terminate the CEO for cause.
FTI Consulting’s investigation uncovered widespread issues, including indicia of sexual harassment and workplace discrimination, later highlighted in the 2025 Netflix docu-series, “Trainwreck: The Cult of American Apparel.” 1
Uncovering and addressing the alleged malfeasance enabled American Apparel to reduce legal risk and focus on company performance.
Based on FTI Consulting’s investigation, the special committee of the board determined that the company’s relationship with the CEO should be terminated.2
The removal allowed the company to avoid additional reputational and legal risk, and end payment of his $832,000 ($1.1 million in 2025 currency) annual salary that he was drawing as a non-supervisory consultant during the investigation.3
Immediately after the separation, the company appointed a new CEO — the first female executive in the company’s history — who was positioned to help the company recover and rebuild.4
Including Forensic Accounting, Technology and Corporate Finance
Under intense media scrutiny, our investigation entailed reviewing more than six million documents, 11 million accounting, expense and payroll records, and conducting more than 50 personal interviews.
FTI Consulting’s team of more than 60 forensic accounting, technology and corporate finance experts conducted the investigation and reported the findings within three months.
The investigation uncovered a long list of failures and malfeasances, ranging from financial mismanagement to gross sexual misconduct, including revelations later detailed in the 2025 Netflix documentary, “Trainwreck: Inside the Cult of American Apparel.”
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