If the daily drumbeat of unfriendly articles is to be believed, it seems that digital media company Ozy has done its fair share of lying: to Goldman Sachs; to producers; to Sharon Osbourne; possibly even to itself about its continued viability, and the legal jeopardy it and its executives, notably founder Carlos Watson, may now find themselves in.
These, by and large, are allegedly lies of the bald-faced sort. But they are not the only sort of fib available to the desperate or ill-disposed; nor are they, allegedly, the only sort resorted to by Ozy. For instance, lets say the folks there were looking to make up for the $40 million they didn’t get from Goldman Sachs on account of the non-star acting turn of once-again-on-leave COO Samir Rao, and had managed to drum up some interest from a wealth-management firm bedecked with a client list that a content provider like Ozy might wish to associate itself with. Would you, if you were Ozy, mention that you’d had to put a senior executive on leave for impersonating a senior executive of another company whose partnership is crucial to your own success?
According to the philosophers, the failure to do so is another sort of falsehood: a lie of omission. Or, as a certain celebrity-stuffed wealth manager would put it, fraud.
In the complaint, LifeLine says that Ozy should have disclosed what had taken place on that call, which occurred before its investment. “Had LifeLine known the foregoing facts it would never have invested in Ozy Media,” the lawsuit says….
Mr. Rao and Mr. Watson also told LifeLine executives that Goldman Sachs was planning “a substantial investment” in the company, the lawsuit says…. Around May 2021, the lawsuit claims, Mr. Rao told LifeLine that Alphabet or one of its Google affiliates would lead another fund-raising round with a $30 million investment in Ozy Media. LifeLine then made a second investment, buying about $250,000 in Ozy shares as part of that round, the suit says.
Ozy Media is accused in a lawsuit of ‘fraudulent conduct.’ [NYT]
Carlos Watson and Ozy Might Be in Real Legal Jeopardy [New York Mag.]
Ozy Media CEO claims his scandal-ridden company will reopen, but doesn’t explain how [CNBC]
For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.