Buzzfeed, Semafor sued by Ozy Media over alleged trade secret theft

NEW YORK, Dec 21 (Reuters) - Ozy Media has sued digital media company Buzzfeed, startup news outlet Semafor and its founder Ben Smith for allegedly stealing trade secrets from the now-shuttered U.S. media and entertainment company, court records filed on Thursday showed.

Ozy and its CEO Carlos Watson were themselves criminally charged earlier this year for scheming to defraud investors of tens of millions of dollars by misrepresenting the company's debts, financial performance and audience size. Both pleaded not guilty.

Neither Smith nor Semafor's communications team immediately responded to requests for comment.

Ozy's complaint alleged that Smith gained an inside view into the company's operations when Buzzfeed, the digital media outlet he once led, considered acquiring Ozy in 2019.

"Semafor was a spitting image of the media company that Carlos Watson had formed a decade earlier: OZY," read the complaint filed in federal court in Brooklyn.

Smith launched Semafor in October 2022.

Buzzfeed, which shuttered its news unit in April, declined to comment.

The lawsuit seeks unspecified compensatory and punitive damages, as well as to have Smith and Semafor pay Ozy "all gains, profits and advantages" derived from the alleged theft.

Ozy closed down in October 2021 after Smith, then a New York Times media columnist, reported that Ozy co-founder Samir Rao impersonated a YouTube executive during a fundraising call with Goldman Sachs and said many of the media company's videos attracted more than a million views on the platform.

Watson, a former Goldman Sachs banker, at the time attributed the incident to a mental health crisis he said Rao was experiencing.

Rao pleaded guilty in February to securities fraud conspiracy.