Commentary

SEC Charges Against Ex-Owner Of 'Ebony' Shouldn't Hinder Relaunch

The Securities and Exchange Commission this week charged several people, including the former owner of Ebony,with raising money for marijuana businesses and using the funds for other purposes. The worst part about the case is that it comes at a time when the magazine is looking to rebuild its brand under a new owner.

Willard Jackson, the former CEO and part owner of Ebony, was among those accused of participating in a crowdfunding scheme that raised about $2 million to buy real estate to lease to cannabis growers. Instead, they diverted hundreds of thousands of dollars for their personal benefit, according to the complaint.

Jackson was forced out of Ebony Media last year after its board had accused him of unapproved financial transactions and trying to take control of the company. Creditors later forced the publisher into bankruptcy, an unfortunate setback for the storied publication that chronicled the experiences of generations of African Americans.

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The SEC said Jackson, Robert Shumake and Nicole Birch conspired to make fraudulent crowdfunded securities offerings for two cannabis and hemp companies, Transatlantic Real Estate and 420 Real Estate. Shumake allegedly led the offerings, but kept his participation secret in order to hide a past criminal conviction arising from a mortgage fraud scheme, per the complaint.
It’s too early to tell whether the SEC’s case will ever go before a jury, or more likely, be settled out of court. The outcome shouldn’t tarnish Ebony, which former NBA star Junior Bridgeman last year acquired for $14 million.
His daughter, Eden Bridgeman Sklenar, leads the venture, which also includes Jet magazine. Since relaunching this year, Ebony’s expansion efforts include a partnership with Bloomberg Media to create original content and cross-promote it through digital channels.
As major advertisers and agencies pledge to allocate more of their media budgets to Black-owned media, Ebony has an opportunity to boost revenue by expanding its audience and rebuilding its brand.
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