Zeta's House of Cards Falls 

David Steinberg, the enigmatic CEO of Zeta Global, has been sidestepping some uncomfortable truths recently. In the wake of the DOJ’s bombshell revelations about Paul Roberts and Kubient, Steinberg’s strategy seems to be a mix of evasion and plausible deniability. His appearances on financial networks paint the picture of a man with everything under control, but peel back the layers, and it becomes clear that the connections between Steinberg and Roberts are as tangled as headphone wires left in a pocket. 

These aren’t casual acquaintances; they’re deep ties spanning years, with business dealings that stretch into some seriously murky waters.

The Kubient Scandal

Let’s start with the elephant in the room. On September 16, 2024, the Department of Justice charged and secured a guilty plea from former Kubient CEO Paul Roberts for orchestrating an accounting fraud scheme. The scope of this fraud is staggering: 94% of Kubient’s reported IPO revenue and 45% of its total 2020 revenue were outright fabrications. This wasn’t just some creative accounting; it was full-on financial theater—an act worthy of a Broadway play. 

The DOJ’s filings also pointed to three contracts at the heart of the fraud, involving an unnamed “Company-1” in the digital advertising space.

And here’s where Zeta Global enters stage left. Despite repeatedly downplaying its relationship with Kubient as “immaterial” to their overall revenue, Zeta’s own 10-K filing from February 2024 tells a different story. Both Zeta and its executives have been subpoenaed by the SEC as part of the Kubient investigation. So why the insistence that this connection is barely worth mentioning? It’s the corporate equivalent of saying, “Nothing to see here,” while smoke billows out of the kitchen.

The Caivis Connection: A Rabbit Hole Worth Exploring

Steinberg’s venture capital firm, Caivis, has also raised eyebrows. Caivis’ website has been mysteriously offline for weeks, despite Steinberg touting its achievements on CNBC. Thanks to the Wayback Machine, it’s clear that Caivis’ leadership—essentially a clone of Zeta’s board—was funding companies like CenterPoint Media in the early 2010s. 

And guess who ran CenterPoint Media? None other than Paul Roberts, the same guy now wearing an orange jumpsuit for his antics at Kubient.

The optics here are atrocious. A VC firm led by Zeta’s top brass invests in a company run by Roberts, only for Roberts to resurface years later at Kubient, allegedly inflating revenues in deals tied to Zeta. Now, with Caivis’ website conveniently scrubbed of its history, it’s hard not to question what’s being hidden. It’s like a crime novel where all the suspects share the same alibi and hope no one looks too closely.

A Pattern of Evasion

Steinberg’s silence on these connections is deafening. Even as Zeta Global pushes its “Zeta 2025 Plan,” which aligns its financial outlook with election-year advertising spend, it’s becoming increasingly clear that the company’s foundations might be shakier than it lets on. The Kubient scandal isn’t an isolated incident; it’s part of a broader pattern that includes everything from leaked customer data to questionable claims about Zeta’s AI capabilities.

tripleAI: Intelligence or Illusion?

Zeta’s self-proclaimed “AI-powered” marketing engine has long been the cornerstone of their pitch, but critics argue it’s more illusion than intelligence. Culper Research alleges that Zeta’s AI is essentially a glorified spam bot, driven by data from platforms like Disqus—another Zeta acquisition. Disqus collects user comments and repurposes them for email marketing campaigns. Opted-in? More like opted-into-a-mess.

Adding fuel to the fire, a director at a competing ad company didn’t hold back, calling Zeta’s AI claims “absolute bullshit” and noting there’s “nothing intelligent about it.” This isn’t just a competitor throwing shade; it’s an industry insider echoing widespread skepticism about Zeta’s grandiose claims.

Adding to the skepticism, Culper’s report highlighted Zeta’s reliance on election-season data from fringe blogs and betting markets. This short-term data strategy, critics argue, underscores the lack of a sustainable growth plan. Zeta’s AI might excel at spamming inboxes, but its ability to drive real, long-term value remains highly questionable.

Stock Buybacks: Confidence or Desperation?

Amid this chaos, Zeta announced a $100 million stock buyback, calling it a “unique opportunity” to stabilize shares. CEO Steinberg and CFO Chris Greiner have framed the move as a vote of confidence in Zeta’s valuation, but skeptics see it as a desperation play to prop up a cratering stock.

Regulatory Scrutiny and Legal Woes

As if things couldn’t get worse, Zeta is now under the microscope of securities law firms investigating potential violations of federal laws. Allegations include questionable accounting practices, deceptive data collection methods, and overstated growth metrics. With regulators circling, Zeta’s leadership has a steep hill to climb to prove their operations are above board.

Data Breach: A Security Nightmare

If the consent farm allegations weren’t enough, Zeta also stumbled into a public relations disaster with a data breach that screams amateur hour. During their heavily promoted Zeta Live 2024 virtual conference—complete with Shaq as a keynote speaker—a publicly accessible portal exposed attendee information, including names, job titles, and companies. No hacking required; just a few clicks on the “Community” and “Attendees” tabs.

For a company selling itself as a secure, AI-powered marketing cloud, this lapse is catastrophic. It’s like your locksmith advertising “impenetrable security” but leaving your house keys under the doormat. Clients are understandably questioning whether Zeta’s assurances of data protection hold any water.

Conclusion: A House of Cards?

Zeta Global’s narrative is unraveling faster than a cheap sweater. Between their connections to a convicted fraudster, dubious data practices, and a glaring data breach, the company is looking less like an AI-powered marketing giant and more like a house of cards built on buzzwords and bravado.

Investors, take note: Zeta’s story may be flashy, but it’s starting to feel like a low-budget magic trick—all smoke and mirrors. The market, and regulators, aren’t likely to be fooled for much longer.

After all, where there’s smoke, there’s fire—and Zeta Global’s corner of the adtech world is beginning to resemble a five-alarm blaze.