Ozy Media Inc.: A Media and Entertainment Company
The Securities and Exchange Commission filed charges against Ozy Media Inc., its CEO Carlos R. Watson, Jr., its former COO Samir Rao, and its former Chief of Staff Suzee Han today, accusing them of defrauding investors of approximately $50 million through repeated misrepresentations concerning the company’s basic financial condition, business relationships, and fundraising efforts.
Ozy Media Inc. is a media and entertainment company that is owned by Carlos R. Watson, Jr. Rao and Han have reached an agreement to settle the allegations made against them.
According to the complaint filed by the SEC, the defendants allegedly routinely and intentionally presented prospective investors with false financial information that grossly inflated Ozy Media‘s annual revenue by at least 100 percent from at least January 2019 through September 2021.
It is also alleged that Watson and Rao solicited investments by repeatedly and dishonestly assuring potential investors that well-known and experienced investors would be investing in Ozy Media in some capacity.
Additionally, according to the SEC’s complaint, Watson and Rao masterminded a scheme in which Rao pretended to be a YouTube executive in order to support Ozy Media‘s false claims to a potential investor at the time that the company was receiving licensing revenue from YouTube when it was not.
When the prospective investor discovered the ruse, Watson allegedly falsely attributed Rao’s impersonation to Rao suffering from a “mental health crisis,” and he made these claims to both the prospective investor and Ozy Media’s Board of Directors. The SEC’s complaint states that Watson made these claims to both parties.
We allege that over the course of several years, the defendants raised approximately $50 million from victim investors on the basis of fraudulent documents and repeated misrepresentations,” said Gurbir S. Grewal, who serves as the Director of Enforcement for the Securities and Exchange Commission (SEC).
At least in one case, the defendants falsely impersonated a potential business partner while meeting with an investment bank,” “This matter demonstrates that we will hold anyone accountable for misrepresentations that impact investors. This includes well-known media personalities,”
The complaint that was submitted by the SEC in the U.S. The defendants are being accused of breaking the anti-fraud provisions of the federal securities laws as well as the rules that are related to those laws by the District Court for the Eastern District of New York.
The SEC is seeking disgorgement with prejudgment interest from Ozy Media and Watson, in addition to injunctive relief and civil penalties against all of the defendants. Additionally, the SEC is seeking officer and director bars against Watson and Rao.
Rao has given his assent to the entry of a judgment that will prohibit him from violating the charged provisions and bar him, for a period of ten years, from serving as an officer or director of a publicly traded company.
The court will determine the amount of any civil monetary penalties at a later date. Rao has also consented to the entry of a judgment that will bar him from violating the charged provisions. Han has given her assent to the entry of a judgment that will permanently enjoin her from violating the provisions that are being charged against her.
The court will decide on the amount of any civil monetary penalties at a later date. The judgments are not final until they have been approved by the court.
In a separate but related action, the United States. Criminal charges have been brought against Ozy Media, Watson, Rao, and Han, according to an announcement made today by the Attorney General’s Office for the Eastern District of New York.
Christine D. Ely, Karolina Klyuchnikova, Lisa Knoop, Lee A. Greenwood, and Alison R. Levine of the SEC’s New York office are currently leading the ongoing investigation being carried out by the SEC. Sheldon L. Pollock is in charge of supervising the investigation’s progress. Both Ms. Klyuchnikova and Ms. Ely will act as primary leaders of the litigation.
The Securities and Exchange Commission is grateful to the Federal Bureau of Investigation and the United States. Office of the United States Attorney for the Eastern District of New York.
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