The last time we wrote about streaming service Akazoo, it was claiming in a financial filing that it had 5.5 million subscribers in September 2019. But the company’s claims – and, indeed, its financial filings – have since landed it in hot water with US financial regulator the SEC. Yesterday, the body announced a $38.8m settlement with Akazoo, having already frozen its assets in September 2020, over allegations of fraud.
They related to Akazoo’s merger with a ‘SPAC’ company to go public in 2019. “Akazoo represented to investors that it was a rapidly growing music streaming company focused on emerging markets with more than 38.2 million registered users, 4.6 million paying subscribers, and over $120 million in annual revenue,” explained the SEC yesterday. “In actuality, the complaint alleged that the company had no paying users and, at most, negligible revenue.”
And after that point it “allegedly continued to have limited operations, no subscribers, and marginal revenue, all while depleting more than $20 million of investor funds”. Akazoo, under new management in 2020, had already confirmed that these allegations were true. This week’s $38.8m settlement resolves the litigation process.
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Tools :: Wyng
Through Music Ally’s internal marketing campaign tracking, we’ve recently discovered an interesting website by the…