Ozy dropped its lawsuit against Semafor founder Ben Smith after CEO Carlos Watson was found guilty of fraud

• Ozy dropped its lawsuit against Ben Smith, Semafor, and BuzzFeed.
• It originally alleged Semafor co-founder Smith stole ideas following BuzzFeed merger talks.

After its former CEO was convicted of a multimillion-dollar fraud scheme this month, the defunct media company Ozy is no longer pursuing its sprawling lawsuit alleging its trade secrets were stolen.

Ozy sued the media company Semafor, its cofounder Ben Smith, and BuzzFeed in December. It alleged Smith plundered Ozy's business ideas when, as the editor in chief of BuzzFeed News, he participated in merger talks with Ozy.

Smith went on to cofound the media company Semafor using Ozy's ideas, the lawsuit alleged.

At the time Ozy filed the lawsuit, its founder Carlos Watson was awaiting trial on criminal charges that he defrauded investors of tens of millions of dollars. Prosecutors said that Watson manipulated Ozy's finances and worked with another executive, Samir Rao, to impersonate a YouTube executive in order to deceive investors. The criminal investigation was sparked partially by Smith, who reported on the impersonation scheme as a columnist for The New York Times, where he worked between his positions at BuzzFeed and Semafor.

A jury in Brooklyn federal court found Watson guilty on all counts on July 16. Rao previously pleaded guilty to securities and wire fraud charges and testified against Watson at trial. Watson's lawyers said they plan to appeal the verdict.

"Ozy Media ultimately collapsed under the weight of Watson's dishonest schemes and with today's verdict, United States Attorney Breon Peace said in a statement earlier this month. "Watson himself has been held accountable for his brazen crimes. My Office is committed to ensuring integrity in the financial markets and protecting investors, small and large, from fast-talking fraudsters looking to betray their trust and separate them from their money."

On Tuesday, lawyers for Ozy told the judge presiding over its civil case against Smith, Semafor, and BuzzFeed that it was dropping the case. US District Judge Frederic Block accepted the withdrawal with an order on Wednesday.

Neither Smith nor lawyers representing Ozy or BuzzFeed immediately responded to requests for comment.