Oct 28 (Reuters) - Ozy Media and its founder Carlos

Watson want a federal judge to step aside from their case and

throw out their securities fraud convictions, saying the judge

had a financial stake in four companies alleged to have been

victims of their offenses through his investments in hedge funds

managed by his former employer.

Watson, a former cable news anchor and investment banker,

and Ozy in a motion filed on Friday pointed to U.S. District

Judge Eric Komitee's 2023 financial disclosure reports, which

showed he had $6 million to $30 million invested in funds

managed by Viking Global Investors.

Komitee had served as general counsel for New York-based

Viking for more than a decade before being nominated by

Republican former President Donald Trump to the federal bench

and confirmed as a judge in 2019.

Watson's lawyer cited those investments, as well as stakes

worth $10 million to $60 million in hedge funds managed by D1

Capital Partners and Junto Capital Partners, which were founded

by former Viking portfolio managers, as reasons why Komitee had

a conflict that should have disqualified him from his case.

The lawyer, Andrew Frisch, said that through those hedge

funds, Komitee held indirect beneficial ownership worth $126,000

to $1.1 million in 2023 in four of the victims of the alleged

fraud at Ozy Media: Goldman Sachs ( GS ), Google owner Alphabet Inc ( GOOG ),

LiveNation Entertainment and JPMorgan Chase.

"These issues created by the 2023 Disclosure arise as public

confidence in the judiciary is plummeting," Frisch wrote.

He pointed to the fallout that resulted from a Wall Street

Journal report in 2021 finding that more than 130 federal judges

had failed to recuse themselves from cases involving companies

in which they or their family members owned stock, prompting

Congress to enact a new law to toughen disclosure requirements.

Komitee late Monday gave prosecutors a Friday deadline to

respond to Watson's motion and asked them to "address both the

timeliness of the motion and the merits thereof." A spokesperson

for U.S. Attorney Breon Peace's office had no comment on

Watson's motion.

Judges are required to recuse themselves when they have a

financial interest in a case by statute and under the Code of

Conduct.

But an exception applies to judges' investments in mutual or

common investment funds that turns in part on how large a fund's

ownership stake in a company is. A rebuttable presumption of

recusal occurs when a fund owns 10% or more of a company.

Ozy, a California-based news and entertainment company,

imploded in 2021 after news reports questioned its audience

numbers and revealed that a top executive had impersonated an

executive at Alphabet's YouTube during a call with Goldman Sachs ( GS )

bankers in which he claimed the streaming site had agreed to pay

for exclusive rights to an Ozy show.

Federal prosecutors alleged Watson and his California-based

news and entertainment company falsified information about Ozy's

finances and audience size, fabricated contracts and inflated

earnings projections to court investors.

The call with the Goldman bankers about a potential $45

million investment was a central part of the case.

But prosecutors say Goldman did not ultimately invest in Ozy

Media and the media company misrepresented having received

investments from several of the other alleged victim companies.

Watson and Ozy are slated to be sentenced by Komitee on Dec.

13 after they were each convicted in July of securities fraud

conspiracy and wire fraud conspiracy. Watson was also convicted

of identity theft.

The case is U.S. v. Watson. U.S. District Court, Eastern

District of New York, No. 23-00082.

For the United States: Jonathan Siegel, Gillian Kassner, and

Dylan Stern of the U.S. Attorney's Office for the Eastern

District of New York

For Watson: Andrew Frisch of the Law Offices of Andrew J.

Frisch

Read more:

Ozy Media founder Carlos Watson convicted in New York fraud

trial

US judiciary toughens guidance for recusing over financial

conflicts

Delays plague US judiciary's financial disclosure database

U.S. judges' investments in Buffett's Berkshire a conflicts

'nightmare' - letter

Congress approves tougher financial disclosure rules for

U.S. judges

(Reporting by Nate Raymond in Boston)