Well, that didn’t take long. Six weeks after the New York Times’ Ben Smith introduced many readers to the colossal wreck of the media company Ozy — and its attempt to defraud Goldman Sachs investors by having an executive impersonate a YouTube bigwig on a conference call — federal investigators are looking into the company, which may or may not be shutting down amid fallout from the scandal and unrelated allegations of really dumb business practices.
According to the Times, the Justice Department and the Securities and Exchange Commission have both opened investigations into Ozy. While the exact focus of the respective criminal and civil inquiries is unclear, Eastern District prosecutors and SEC investigators have contacted firms with business dealings or potential investments with Ozy, a company that was accused by investors of “fraudulent conduct” in civil court last month. In an email to investors in October also viewed by the Times, CEO Carlos Watson acknowledged that his company “heard from” the SEC and DOJ and had hired the white-collar firm Zuckerman Spaeder. Watson previously said of the firm’s alleged fraud attempt that “just because something is sloppy or stupid doesn’t mean it’s illegal.”
It’s unclear to what extent the company with an (at best) opaque approach to fundraising and web traffic still exists. On Friday, October 1, the firm announced it would close, firing 75 of its employees. But by the next week, Watson said it would remain “open for business.” Since then, the company has sent out an email newsletter to subscribers and has frequently reposted clips from Watson’s talk show, but little else has been posted to the site. Just as it was before Ozy’s crisis of confidence began, the clips of Watson talking to or about celebrities have remarkably little engagement.