Home  › Email › Email Marketing

Email Marketing Service Accused of Investor Fraud

  |  May 13, 2011   |  Comments

Feds allege mUrgent misled investors about business results and customers.

An email marketing company that caters to restaurants has been accused of investor fraud.

mUrgent, a family-controlled business based in Santa Ana, CA, allegedly offered $10 million of stock to investors, but misrepresented its business relationships and results, according to a Securities and Exchange Commission complaint. The SEC also alleges that mUrgent misrepresented its plans for an initial public offering.

"These guys are a pretty big player in the restaurant email vertical," said Simms Jenkins, CEO of BrightWave Marketing, an email-focused digital agency that also has a strong presence in the restaurant vertical.

mUrgent did not reply to requests from ClickZ News asking for its response to the SEC allegations.

In a lawsuit filed in U.S. District Court last month, the SEC contends mUrgent's management hired "fronters" to make cold calls, beginning in 2008, to identify likely investors and "closers" to finish the sales.

During those calls and in investor information packets, mUrgent identified companies they claimed were major customers. "In fact some of these major, well-known companies did not have any business relationship with mUrgent when investors were solicited," the SEC stated in its lawsuit.

"Many investors wrote checks or wired monies to buy mUrgent shares solely in reliance on the false promise of mUrgent's upcoming public offering or other rosy business prospects," the SEC stated in its lawsuit.

mUrgent, a family-controlled private company, raised approximately $9.6 million from at least 130 investors, according to the SEC.

Named as defendants in the case were: CEO Vladimir "Boris" Bugarski, Chief Financial Officer Vladislav "Walter" Bugarski, and Chief Operating Officer Aleksander ("Aleks") Negovan Bugarski. Boris and Aleks are twin brothers; their father is Walter.

The SEC also charged the Bugarskis misused investor funds, collecting cash salaries and bonuses totaling more than $400,000 each.

"The Bugarskis also used mUrgent as their personal piggybank and funded their lifestyle by charging the company for numerous expenses such as luxury cars for Walter and his wife," the SEC alleged.

According to mUrgent's website, its past or current clients - identified as "Who has trusted mUrgent" - purportedly include Marriott, Bojangle's, Golden Corral, and Denny's.

Tags:

ClickZ Live Toronto On the heels of a fantastic event in New York City, ClickZ Live is taking the fun and learning to Toronto, June 23-25. With over 15 years' experience delivering industry-leading events, ClickZ Live offers an action-packed, educationally-focused agenda covering all aspects of digital marketing. Register today!

ClickZ Live San Francisco Want to learn more? Join us at ClickZ Live San Francisco, Aug 10-12!
Educating marketers for over 15 years, ClickZ Live brings together industry thought leaders from the largest brands and agencies to deliver the most advanced, educational digital marketing agenda. Register today and save $500!

ABOUT THE AUTHOR

Anna Maria Virzi

Anna Maria Virzi, ClickZ's executive editor from 2007 until 2012, covered Internet business and technology since 1996. She was on the launch team for Ziff Davis Media's Baseline and also worked at Forbes.com, Web Week, Internet World, and the Connecticut Post.

COMMENTSCommenting policy

comments powered by Disqus

Get ClickZ Email newsletters delivered right to your inbox. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

Gartner Magic Quadrant for Digital Commerce

Gartner Magic Quadrant for Digital Commerce
This Magic Quadrant examines leading digital commerce platforms that enable organizations to build digital commerce sites. These commerce platforms facilitate purchasing transactions over the Web, and support the creation and continuing development of an online relationship with a consumer.

Paid Search in the Mobile Era

Paid Search in the Mobile Era
Google reports that paid search ads are currently driving 40+ million calls per month. Cost per click is increasing, paid search budgets are growing, and mobile continues to dominate. It's time to revamp old search strategies, reimagine stale best practices, and add new layers data to your analytics.

WEBINARS

Resources

Jobs

    • GREAT Campaign Project Coordinator
      GREAT Campaign Project Coordinator (British Consulate-General, New York) - New YorkThe GREAT Britain Campaign is seeking an energetic and creative...
    • Paid Search Senior Account Manager
      Paid Search Senior Account Manager (Hanapin Marketing) - BloomingtonHanapin Marketing is hiring a strategic Paid Search Senior Account Manager...
    • Paid Search Account Manager
      Paid Search Account Manager (Hanapin Marketing) - BloomingtonHanapin Marketing is hiring an experienced Paid Search Account Manager to...