The CEO of Ozy Media, Carlos Watson, called the incident in which the company's co-founder impersonated a YouTube executive during a call with a Goldman Sachs investor "heartbreaking."
The New York Times published a column reporting on several scandals within the company, including an incident involving Ozy's chief operating officer and co-founder, Samir Rao. Rao reportedly impersonated a YouTube executive during a conference call with an investor from Goldman Sachs.
Watson, a former cable-news commentator and host who founded Ozy in 2013, said, "I don't know. I wasn't there," about the events of the call. He then went on to say that they eventually "figured out what happened," but did not offer further explanation.
In an email to the Times and an apology to Goldman Sachs, Watson attributed the incident to a mental health crisis.
"Look—it's heartbreaking, it's wrong, it's not good, it's not OK," Watson said. "I love Goldman, I worked there, I've got a lot of friends there."
For more reporting from the Associated Press, see below.
Watson said it had been "premature" to shut down and that he wants the media company to keep operating.
Watson told CNBC on Monday morning that he has been meeting with advertisers and investors over the weekend and that he wants Ozy to continue to be around. The company did not answer emailed questions Monday about whether employees were still working or getting paid or how Ozy intended to stay open.
The website had at least one new post as of Friday, when Ozy's board of directors on said the company was ceasing operations. The shutdown came less than a week after a Times column raised questions about the media organization's claims of millions of viewers and readers, while also pointing out a potential case of securities fraud.
The story triggered canceled shows, an internal investigation, investor concern and high-level departures at the company.
Mountain View, California–based Ozy, which had raised more than $70 million from investors as of late 2019, according to the website Crunchbase, has long been suspected of inflating its audience size. Watson claimed last week that Ozy had 25 million subscribers to its newsletter and 30 million YouTube views. The New York Times, with a much bigger brand presence, says it has 15 million newsletter readers. The newspaper reported that fewer than 500,000 people went to Ozy's website in June and July, according to Comscore data.
On Thursday, Marc Lasry, the hedge-fund billionaire and Milwaukee Bucks co-owner who had been named Ozy's chairman in September, resigned, citing Ozy's need for someone experienced in crisis management and investigations. He remained an investor.
A high-profile employee, former BBC anchor Katty Kay, resigned earlier in the week, and an early investor, a venture capital firm, gave up its Ozy shares. The board had reportedly hired a law firm to review Ozy's business activities.
Cable network A&E pulled a special on mental health hosted by Watson that was scheduled for Monday night, and Watson stepped down from hosting a documentary Emmy awards show Wednesday night.
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