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.
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.
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.