FOIAengine Reveals Who’s Watching Whom
Short seller Christian Lamarco likes to court controversy. When he founded his New York firm in 2019, he named it Culper Research – after the Culper Spy Ring, which operated during the American Revolution.
Those revolutionary spies reported back to George Washington on the movements of British forces and unmasked the traitor Benedict Arnold – a man whose name, like those of some activist short sellers, remains synonymous with betrayal and sinister self-interest.
As one of the market’s most visible activist short sellers, Lamarco quickly gained a reputation as a spy of a different sort, seeking to take down companies that, his website says, “have misrepresented their operations, failed to disclose significant risks, misused capital, possess accounting irregularities, or otherwise deceived investors.”
The 37 companies Lamarco has targeted include recent highfliers like Archer Aviation (NYSE: ACHR), Gorilla Technology (NASDAQ: GRRR), OSI Systems (NASDAQ: OSIS) and AppLovin Corporation (NASDAQ: APP). Lamarco always slaps them with memorable taglines (Gorilla: “Fake Products, Fabricated Contracts, Fraudulent Partners”; OSI: “DOJ Subpoenas Fly, Execs Wave Goodbye”). You can see his latest hit list here.
Some of his angry targets have responded with lawsuits. But that hasn’t deterred Lamarco from doubling down, using social media to amplify his attacks. The most recent example: On May 20, Lamarco got outsized attention for his latest short play, against Archer Aviation, by challenging late-night host Jimmy Fallon to a $1 million bet over the airworthiness of Archer’s “Midnight” electric-powered vertical takeoff and landing aircraft.
Fallon recently featured the aircraft on The Tonight Show. The Midnight is supposed to be the official air taxi service of the 2028 Los Angeles Olympics. But Lamarco called the whole thing a sham, asserting that Archer “systematically lied” about the progress of its flagship vehicle and paid millions to secure its CEO a May 15 appearance with Fallon, who a month earlier also attended a promotional event for the company.
Lamarco claimed he had evidence that there’s no way the Midnight will fly by 2028 – and tried to bait Fallon into the million-dollar wager in a post on X.
There was no response from the NBC host, but that doesn’t matter – Lamarco got the eyeballs, and maybe the payoff, that he sought. Archer’s share price dropped significantly after Lamarco slammed it in his report titled “When You Can’t Earn Airtime in the Sky, Buy it on Late Night Television.”
We were among those who were intrigued by Lamarco’s cheeky taunt. Which brings us to this week’s story, in which we highlight how FOIA requests sometimes reveal the early signals and intersecting paths of multiple investigators.
As we dug into PoliScio Analytics’ competitive-intelligence database FOIAengine, which tracks FOIA requests in as close to real-time as their availability allows, we discovered an investigator using FOIA to track Lamarco and another activist short seller, Lauren Balik. FOIA requests also revealed that same investigator’s interest in the high-end investigative news service Capitol Forum. It turned out that requests were all related: spies watching spies.
It’s not unusual for us to see dozens of requests each month in FOIAengine from Capitol Forum’s big staff of investigators on a wide range of topics of interest to the company’s subscribers among law firms, big corporations, and hedge funds.
But lone-wolf investigator Molly Donaldson was an anomaly. Donaldson is a modern-day Dick Tracy – a lawyer and licensed private investigator running a Wall Street detective shop called Waverly Research. Donaldson didn’t have a footprint in FOIAengine until she filed multiple requests with the FTC and FDA about Lamarco, Balik, and Capitol Forum. Her requests came in after the two short-sellers tried to bring down an ad-tech company called Zeta Global (NYSE: ZETA). Lamarco and Balik claimed, in essence, that Zeta Global’s business model was built on fraud. (Zeta Global denies this.)
Here’s how this three-way tangle of Spy vs. Spy vs. Spy played out.
Capitol Forum was the first to publish a warning about Zeta Global, last October 4. The story – only for its subscribers – was titled “Zeta Global: Company’s Practices Mirror Those Identified as Problematic in Recent FTC Report, Potentially Exposing Company to Regulatory Risk.” A mouthful, but you get the idea. Not good.
But even before Capitol Forum published that story, numerous FOIA requests had already signaled investigative interest in Zeta Global. FOIA requests to the federal government can be an important early warning of bad publicity, litigation to come, or uncertainties to be hedged and gamed out. And FOIA requests were coming in that seemed to spotlight trouble ahead for Zeta Global.
Four months before Capitol Forum broke its story, a requester identified only as Trillo Gables asked the Federal Trade Commission for “all records regarding investigations, complaints, legal actions, consent orders, and other enforcement matters involving the following companies: Zeta Global Holdings Corp. (and any predecessor or subsidiary entities) [and] Disqus, Inc. (a subsidiary of Zeta Global) (Date Range for Record Search: From 1/1/2017 To 5/29/2024).”
Next came Joe O’Donnell, CEO of Canary Data, which calls itself “the world’s largest and most comprehensive database of investment risk.” A month before Capitol Forum’s story, O’Donnell asked the SEC for” the conduct, disclosures, and/or transactions of the registrant Zeta Global from January 1, 2023.”
FOIA requests kept homing in on the signal. Three weeks before Capitol Forum’s story, a requester identified only as Kevin Zeng made a request to the FTC that was spot on with the story that Capitol Forum was about to break. Zeng sought “records re: investigation into Zeta Global or its subsidiaries, primarily Apptness Media Group, Disqus, and Arcamax Publishing over consent farming/collection of first party data (this topic broadly) [and] any complaints submitted against Zeta Global or its subsidiaries (same as above) for consent farming/deceptive marketing.”
Finally, in its October 4 story, Capitol Forum pulled the threads together, explaining how “marketing technology companies like Zeta Global use extensive web tracking tools and third-party data brokers to amass profiles on millions of individuals, then utilize artificial intelligence to make inferences about potentially sensitive personal interests for marketing and advertising purposes, all practices scrutinized by a recent Federal Trade Commission report.”
Despite that warning, Zeta Global’s stock price kept moving upward.
About a week after the Capitol Forum alert, short-seller Balik went public with a disparaging report, announcing in a tweet on X in mid-October that she was shorting Zeta. “Nobody’s really following this company,” she tweeted, “but many want to know what’s up.”
Balik soon answered her own question by posting multiple attacks against Zeta on her website called the Captain’s Log. Balik accused Zeta of inflating revenue and poor data governance. Her posts had titles like “Zeta Global Can’t Secure Their Own Customer Data” (Balik claimed she’d hacked Zeta’s site), “Zeta Global Is an AI Scam,” and “How Zeta Global Cooks Revenue Guidance.”
But Balik’s attack didn’t get any traction. Again, Zeta’s stock price continued to rise, hitting a high of $38 on November 11.
Then short-seller Lamarco jumped in, posting a scathing chapter-and-verse report about Zeta Global on his website. The report accused Zeta of using “consent farms” to deceptively gather consumer data through misleading tactics.
He also accused Zeta of “round tripping” – artificially inflating ad clicks and impressions by repeatedly sending traffic back and forth between the same or similar web properties.
Lamarco titled his report “Shams, Scams, and Spam.”
Within a day, Zeta’s stock price fell by more than half, to $16.50. Finally forced to respond, Zeta issued a statement a few days later, claiming that a previously undisclosed “forensic review” by “external forensic accountants” in 2022 and 2023 “found its practices sound and financial statements accurate, debunking claims made about Zeta Global in a recently published false and misleading report.”
But lasting damage had already been done. Since then, Zeta’s stock price has fallen further, and the stock remains heavily shorted. Multiple law firms began trolling for prospective plaintiffs for securities class actions.
And the pace of FOIA requests about Zeta Global soon picked up again.
Numerous additional requests came in from Canary Data. Those were submitted to the FTC and the SEC. It made sense that Canary Data would be poking around given the risk-on exposure tied to Zeta Global.
More out of the ordinary were the requests that began coming in from Molly Donaldson, the private investigator who runs Waverly Research. In addition to asking about Zeta Global, Donaldson sought information about Capitol Forum.
Donaldson’s bio on the Association of Workplace Investigators website lists her office at 11 Broadway, in New York’s Wall Street neighborhood, and says she holds bar memberships and private investigator licenses in New York and Minnesota. Her specialties include business intelligence and litigation support – both areas where FOIA can be valuable.
Last December, as Zeta Global’s stock tanked, Donaldson filed seven broad requests with the FDA and FTC seeking contacts between those agencies and Lamarco and Balik and various “d/b/a” entities and alias emails associated with them. Donaldson also pinged the same agencies for any contacts with Capitol Forum from the past five-plus years that mentioned Zeta Global.
Typical of the log entries was this one, to the FDA from Waverly Research, seeking “all documents and correspondence/communication pertaining to Shadyside Partners LLC, Christian Matthew Lamarco (a/k/a Christian M. Lamarco or Christian Lamarco) and Culper Research, including any correspondence with email addresses b(6)@culperresearch.com, b(6)@protonmail.com, b(6)@shadysidepartners.com, or any email addresses with the email domains @culperresearch.com and @shadysidepartners.com.” (According to Docket Alarm, Lamarco’s Culper Research is a “d/b/a” of Shadyside.)
Waverly’s request to the FDA about Capitol Forum sought “any FOIA requests submitted by DBW Partners, LLC (d/b/a The Capitol Forum) related to Zeta Global and all corresponding responses to those FOIA requests. (Date Range for Record Search: From 6/18/2019 To 12/12/2024).”
A similar request about Capitol Forum, this time to the FTC, was logged in early January. Donaldson sought “any FOIA requests submitted by DBW Partners, LLC (d/b/a The Capitol Forum) related to Zeta Global and all corresponding responses to those FOIA requests. (Date Range for Record Search: From 6/18/2019 To 12/12/2024).” Note: a search of FOIAengine didn’t turn up any Capitol Forum FOIA requests about Zeta Global.
This is an interesting case study in how seemingly disparate FOIA requests can sometimes reveal who’s watching whom, and why. We could make an educated guess about the identity of Donaldson’s client, but, still, we had to ask her. We didn’t hear back.
FOIAengine access now is available for all professional members of Investigative Reporters and Editors, a non-profit organization dedicated to improving the quality of journalism. IRE is the world’s oldest and largest association of investigative journalists. Following the federal government’s shutdown of FOIAonline.gov last year, FOIAengine is the only source for the most comprehensive, fully searchable archive of FOIA requests across dozens of federal departments and agencies. FOIAengine has more robust functionality and searching capabilities, and standardizes data from different agencies to make it easier to work with. PoliScio Analytics is proud to be partnering with IRE to provide this valuable content to investigative reporters worldwide.
To see all the requests mentioned in this article, log in or sign up to become a FOIAengine user.
Next: Hedge fund requests to the SEC, FTC, and FDA.
John A. Jenkins, co-creator of FOIAengine, is a Washington journalist and publisher whose work has appeared in The New York Times Magazine, GQ, and elsewhere. He is a four-time recipient of the American Bar Association’s Gavel Award Certificate of Merit for his legal reporting and analysis. His most recent book is The Partisan: The Life of William Rehnquist. Jenkins founded Law Street Media in 2013. Prior to that, he was President of CQ Press, the textbook and reference publishing enterprise of Congressional Quarterly. FOIAengine is a product of PoliScio Analytics (PoliScio.com), a new venture specializing in U.S. political and governmental research, co-founded by Jenkins and Washington lawyer Randy Miller. Learn more about FOIAengine here. To review FOIA requests mentioned in this article, subscribe to FOIAengine.
Write to John A. Jenkins at [email protected].
