Ozy Media is charged in a “fraudulent conduct” trial.
A fund manager who has invested more than $ 2 million in Ozy Media filed a complaint on Monday, saying the company “had engaged in fraudulent, deceptive and illegal behavior.”
The lawsuit, filed by LifeLine Legacy Holdings of Beverly Hills, Calif., Claims that Ozy did not disclose relevant facts about its business in February, when LifeLine was considering its investment.
LifeLine cites a conference call that took place the same month between Ozy and Goldman Sachs. During this call, as reported by The New York Times, an Ozy executive apparently impersonated a YouTube executive; the purpose of the identity theft was to assure the Goldman team that the videos produced by Ozy were a hit on YouTube.
In its legal complaint, LifeLine said Ozy should have disclosed information about that call. “If LifeLine had known the above facts, it would never have invested in Ozy Media,” the lawsuit said.
The lawsuit was filed in U.S. District Court for the Northern District of California, where Ozy Media is based. LifeLine said it was approached by Ozy co-founder and COO Samir Rao at the end of 2020.
LifeLine said in the lawsuit that Mr. Rao and Carlos Watson, the founder of Ozy Media, told LifeLine executives that Goldman Sachs planned to make “a substantial investment” in the company.
LifeLine agreed to invest $ 2 million in Ozy Media in 2021 after being assured that Ozy had “strong business performance, investments from leading institutional investors, strong viewing metrics and management of ‘competent and honest company’, according to the lawsuit.
Around May 2021, according to the lawsuit, Mr. Rao told LifeLine that Alphabet or one of its affiliates of Google was leading another round of funding with a $ 30 million investment in Ozy Media. LifeLine then purchased approximately $ 250,000 in shares as part of this fundraiser.
Ozy said in a statement Friday that it had closed its doors. In televised appearances on Monday, Mr Watson, the head of the company, said he was trying to bring the company back to life.
LifeLine is seeking a jury trial. He also demanded reimbursement for all the money he gave Ozy and asked the court to award punitive damages.
This is a developing story. Check back for updates.