The Department of Justice (DOJ) and Securities and Exchange Commission (SEC) are reportedly investigating Ozy Media after the company announced last month that it was closing in the wake of a New York Times report that said top executives engaged in a scheme to deceive potential investors.
The Times, citing people with knowledge of the matter, reported on Wednesday that the DOJ and SEC have contacted companies that had ties to Ozy. DOJ investigators have reportedly spoken to at least one company that did business with Ozy, and the SEC has reportedly contacted at least two groups that were in talks about investing in Ozy.
Ozy Chief Executive Carlos Watson mentioned the investigations in an email to investors last month, according to the Times, which reviewed the letter. He wrote that the company “had heard” from the DOJ and SEC and that it had recruited the law firm Zuckerman Spaeder “to help us navigate the investigations.”
Since that email was sent, an unidentified source told the Times that Andrew Levander of the law firm Dechert was enlisted to represent the media company.
The Hill reached out to Ozy Media and Levander for comment.
While the central focus of investigators is not known, according to the Times, it is apparent that the probes remain in the early stages.
A spokesperson for the Eastern District of New York said he could not confirm or deny that the investigation was underway when reached by the Times, and a spokeswoman for the SEC declined to comment to the newspaper.
One clue into the SEC investigation, according to the Times, could be a lawsuit filed last month that alleges that Ozy misled potential investors. Statements companies send to investors are sometimes scrutinized by the SEC during investigations, the newspaper noted.
Ozy Media announced on Oct. 1 that it was shuttering operations following the Times report published days before that accused an individual at the company, later identified as Ozy Chief Operating Office Samir Rao, of impersonating a YouTube executive during a conference call with Goldman Sachs, which at the time was mulling investing in the company.
Rao reportedly claimed that YouTube had a strong working relationship with the media company and that its videos were flourishing on the platform.
Rao is no longer associated with the company, according to the Times.
Last month, however, Watson said the company was not actually shutting down.
“We’re going to open for business, so we’re making news today,” he said during a television interview.