The Securities and Exchange Commission on Thursday charged a Santa Ana, Calif.-based e-mail marketing company, along with a father and twin sons who are the company's executives, with defrauding investors in a $10 million boiler room scheme.
The SEC alleges that mUrgent Corporation, chief financial officer Vladislav Walter Bugarski, and his sons Vladimir Boris Bugarski (chief executive officer) and Aleksander Negovan Bugarski (chief operating officer) operated a boiler room 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. 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.
"mUrgent falsely portrayed itself to investors as a successful company with imminent plans to go public," said Rosalind R. Tyson, Director of the SEC's Los Angeles Regional Office. "Instead, the Bugarskis used the company as their personal piggybank."
According to the SEC's complaint filed in federal court in Los Angeles, 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, financial penalties, and an order prohibiting the Bugarskis from serving as officers or directors of any public company.