FORMER J.CREW EXECUTIVE CHARGED WITH INSIDER TRADING

FROM: U.S. SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission today announced that it filed an insider trading civil action in the United States District Court for the Southern District of New York against Frank A. LoBue, a former Director of Store Operations at J.Crew Group, Inc. (J.Crew). The complaint alleges that LoBue used material, nonpublic information about sales and expenses of the company’s stores to purchase J.Crew common stock in advance of earnings announcements in May and August 2009.

The Commission’s complaint alleges that in the course of his employment LoBue regularly received nonpublic information about J.Crew’s "Stores" component, which comprised approximately 70% of the company’s sales. In April and May 2009, LoBue received several reports containing information about J.Crew’s expenses, payroll costs, and store sales results for the company’s fiscal first quarter ended May 2, 2009. The reports showed results that were better than expected. The complaint further alleges that LoBue breached duties he owed to the company and its shareholders by using the information to purchase 2,300 shares of J.Crew stock in advance of the company’s May 28, 2009 quarterly earnings release. The market reacted positively to the release, with J.Crew’s stock closing up 26.4% from its prior close.

The complaint also alleges that in July and August 2009 LoBue continued to receive the reports on J.Crew stores, including stores’ sales figures, and that the information showed that the company was experiencing an improving sales trend. The complaint alleges that LoBue again breached his duties by using this information to purchase another 11,680 shares of J.Crew stock ahead of the company’s August 27, 2009 second quarter earnings release. The day following the release, J.Crew stock closed up 6.01% from its prior close. LoBue’s aggregate illicit profits from trading alleged in the complaint were at least $60,735.60. J.Crew terminated LoBue’s employment in February 2010.

Without admitting or denying the allegations in the complaint, LoBue has consented to the entry of a proposed final judgment permanently enjoining him from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; ordering him to pay disgorgement of $60,735.60, plus prejudgment interest thereon of $6,749.33; and imposing a civil penalty in the amount of $60,735.60. The proposed settlement is subject to the approval of the District Court.

The Commission acknowledges the assistance of the Financial Industry Regulatory Authority.