The board of directors of Ozy, a digital media company, said on Tuesday it had hired a law firm to investigate its “business activities” after a New York Times report raised questions about company practices.
In a statement, the board said it hired Paul, Weiss, Rifkind, Wharton and Garrison, a large international company headquartered in New York City, to lead the review. The board also said it had asked Samir Rao, chief executive of Ozy, “to take time off while awaiting the results of the investigation.”
“We will continue to review the leadership of the company in the coming months,” the board said in the statement.
Founded in 2013, Ozy has a general news site, publishes numerous newsletters and produces interview programs and documentaries, some of which are broadcast on YouTube. Times media columnist Ben Smith reported that Mr. Rao apparently impersonated a YouTube executive during a February conference call with Goldman Sachs bankers considering a deal to invest $ 40 million in Ozy. During the call, the person posing as the executive told bankers that Ozy’s videos were a big hit on YouTube.
Ozy founder Carlos Watson told The Times and posted on Twitter that Mr. Rao was going through a mental health crisis at the time of the call. He added that Mr. Rao took leave afterwards but has since returned to the company, which is based in Mountain View, Calif. Marc Lasry, hedge fund manager, co-owner of the Milwaukee Bucks basketball team and chairman of the board of directors of Ozy, told The Times in a statement for the article published on Sunday that “the board of administration has been informed of the incident and we fully support the way it was handled. ”
After the conference call, Goldman Sachs canceled its potential investment in Ozy, and Google, owner of YouTube, alerted the Federal Bureau of Investigation. (The FBI’s field office in San Francisco would not confirm or deny the existence of an investigation.)
On Tuesday, Ozy’s board said that Harry Hawks, former executive chairman and chief financial officer of Hearst Television, will serve as interim chief financial officer while the company’s management is under review.
News of the investigation was first reported by The Wall Street Journal.