Ozy Media billed itself as "the New and the Next" as its charismatic cofounder, former MSNBC and CNN host Carlos Watson, attracted millions of dollars from investors on a promise to attract young, sophisticated audiences.
But on Wednesday, the once-buzzy company didn't even have representation in court as it was arraigned on securities fraud and wire fraud charges.
There was confusion when representatives for the company were a no-show at its arraignment at a federal courthouse in Brooklyn. A judge had to enter a plea of "not guilty" on its behalf.
Outside the courtroom, a public defender who had been hurriedly assigned to represent the company at the hearing quickly tried to make sense of the case. She asked a journalist what Ozy did and what the case was about.
Later, she was excused from what is expected to be a complex and sprawling case involving hundreds of thousands of documents and allegations that the company's executives misrepresented its financial standing and the size of its audience.
Founded in California's Silicon Valley in 2013, Ozy marketed itself as a progressive digital platform, providing a place for fresh perspectives on news, culture entertainment, business and technology.
It published stories on a website, produced podcasts and TV shows and held an annual festival in New York's Central Park that was a mix of big-name music performances and talks by public figures.
But prosecutors said that while the company initially successfully raised tens of millions of dollars to fund its growth, it got desperate as it began hemorrhaging money.
Between 2018 and 2021, prosecutors said, Ozy and its founders lied to investors about the company's debts and other pertinent financial information. The SEC contends that Watson and his company defrauded investors of about $50 million.
The company shut down in 2021, a week after a report by the New York Times detailed an episode in which the company's chief operating officer impersonated a YouTube executive during a pitch to Goldman Sachs, which had been considering infusing money into the media enterprise.
Federal prosecutors filed criminal charges in late February accusing Watson and the company of bilking investors. Watson was also charged with identity theft over the alleged impersonation of several media executives. He has pleaded not guilty.
The company's former chief operations officer, Samir Rao, pleaded guilty last month, as did Ozy's former chief of staff, Suzee Han. Both were released on bail to await sentencing.
It was unclear why the company has been unable to retain a lawyer. Watson's attorney could not be reached for comment. The company ceased business operations last week.
Assistant U.S. Attorney Jonathan Siegel told the judge that prosecutors wanted to proceed with the case and asked the judge to appoint a lawyer for the company until it can find an attorney of its own.
