mURGENT: Franchise Email Vendor Charged With $10M Fraud
June 3, 2011
mUrgent provides email marketing and web services to many major franchise chains and has been the service provider to the International Franchise Association (IFA). mUrgent founder Boris Bugarski is a frequent fixture at IFA and industry events. Now he’s charged with running a $10M boiler room scheme selling unregistered stock… and the SEC alleges he’s done it before.
Here’s the press release from the Securities and Exchange Commission:
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21944 / April 21, 2011
Securities and Exchange Commission v. mUrgent Corporation, et al., United States District Court for the Central District of California, Civil Action No. SACV11-626 DOC (SSx)
SEC CHARGES SANTA ANA-BASED COMPANY AND THREE EXECUTIVES WITH $10 MILLION BOILER ROOM FRAUD
On April 21, 2011, the Securities and Exchange Commission filed a complaint in the United States District Court for the Central District of California against mUrgent Corporation, Vladislav Walter Bugarski (Walter), and his twin sons Vladimir Boris Bugarski (Boris) and Aleksander Negovan Bugarski (Aleks). The SEC alleges that the defendants defrauded investors in a $10 million boiler room scheme.
The SEC alleges that mUrgent, chief executive officer Boris Bugarski, chief financial officer Walter Bugarski, and chief operating officer Aleks Bugarski operated a boiler room at the company to sell mUrgent stock. Boiler room employees cold-called investors, used high pressure sales tactics, and misrepresented to investors that mUrgent had a prospering business and would imminently conduct an initial public offering (IPO). The SEC also alleges that mUrgent and the Bugarskis falsely told investors that stock sale proceeds would not be used to pay cash salaries to the Bugarskis.
According to the SEC’s complaint, mUrgent and the Bugarskis conducted two unregistered securities offerings beginning in 2008 that raised nearly $10 million from at least 130 investors nationwide. The Bugarskis misused investor money to fund more than $1.3 million in cash salary and bonuses for themselves. They also established a separate “slush fund” of more than $500,000, and used investor funds to pay for luxury cars and other personal expenses.
The SEC seeks permanent injunctions against mUrgent and the Bugarskis for violations of the antifraud, offering registration, and broker registration provisions of the federal securities laws, disgorgement, civil penalties, and an order prohibiting the Bugarskis from serving as officers or directors of any public company.
As alleged in the SEC’s complaint, the defendants violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
ARE YOU FAMILIAR WITH mURGENT, BORIS BUGARSKI, ALEKS BUGARSKI OR WALTER BUGARSKI? WHAT DO YOU THINK? SHARE A COMMENT BELOW.