The Department of Justice and Securities and Exchange Commission have launched investigations into embattled digital media firm, Ozy Media, according to a report.
The SEC and DOJ have contacted companies that had dealings with Ozy, The New York Times reported Wednesday, citing anonymous sources. DOJ investigators spoke to at least one company that did business with Ozy, and the SEC has contacted at least two companies that discussed investing in the firm, the report said.
The SEC and DOJ did not immediately return requests for comment.
While the central focus of the investigation is unknown, the probe comes a month after The Times revealed that Ozy’s co-founder and COO Samir Rao impersonated a YouTube executive on a call with potential investor Goldman Sachs. That article and several follow-up stories have also claimed that Ozy frequently inflated key business metrics to other investors and even lied to its own employees about business operations.
Goldman Sachs walked away from its potential investment in Ozy after it discovered that it had been misled during the conference call, which took place in February.
Insiders told The Post that in recent months, David Solomon’s bank spent nearly $300,000 on a new advertising partnership with Ozy, which went up in flames as scandals came to light, including a high-profile one, in which Watson lied about getting an investment from Sharon and Ozzy Osbourne after the duo filed a 2017 trademark lawsuit over Ozy Media’s annual concert and festival, which is called Ozy Fest.
For years, The Osbournes had produced the Ozzfest music festival, which featured acts such as Black Sabbath, Tool and Slayer.
Federal authorities got involved after Goldman Sachs alerted YouTube’s security team, which prompted its parent company, Google to contact them. The report did not specify the timing, however.
With Ozy’s business unraveling, the FBI launched a probe in late September into the phone call that alleged Rao pretended to be a YouTube exec in order to drum up investor dollars. On Oct. 1, Ozy announced it was shuttering amid the FBI investigation and the media frenzy surrounding the company. In a bizarre turn of events, Watson said the decision to close the company had been reversed just three days later.
“We’re going to open for business, so we’re making news today,” Watson said while appearing on NBC’s “Today” on Oct. 4. “This is our Lazarus moment, if you will, this is our Tylenol moment. Last week was traumatic, it was difficult, heartbreaking in many ways.”
According to The Times’ most recent report, Watson had informed investors via email last month that Ozy had “heard from” the SEC and DOJ, adding that the company had hired the law firm Zuckerman Spaeder “to help us navigate the investigations.”
Since that email, Ozy enlisted Andrew Levander, the chairman of the law firm Dechert, for legal counsel, the report said.
Rao, who co-founded Ozy with Watson in 2013, is reportedly no longer with the company.