MindArrow Back on Track Following Stock Debacle
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Rich media e-mail marketer MindArrow Systems looks to be back on track following a lengthy stock-sale debacle, closing an earlier acquisition and cementing a patent for e-mail e-commerce transactions.
Wednesday, the company received a parent for technology that it acquired earlier this week, through the purchase of Alley-based Control Commerce.
U.S. Patent No. 6,247,074 ("Method and Apparatus for Facilitating Computer Network Transactions") covers Control Commerce's methods and systems for enabling e-commerce transactions in a Web site, banner ad, or e-mail.
As a result, MindArrow said the transaction system developed by Control Commerce -- which allows recipients to conduct a full e-commerce transaction within an e-mail or Web page banner -- would be integrated into its MindArrow Messenger suite, as MindArrow Merchant. MindArrow said Merchant should launch during the next several weeks.
In early February, regulators halted trading of the company on Nasdaq following an internal investigation which revealed that more than $16 million in stock had been authenticated without authorization by MindArrow.
But earlier this week, federal investigators said two of MindArrow's former transfer agents had admitted their role in the scheme to sell unauthorized shares of the firm's stock.
The two culprits, Maseia "Matthew" Bardasian and Nikki Ann Daly, agreed to plead guilty to fraud and money laundering charges in the unauthorized issuance of more than 1 million shares of MindArrow's stock -- which company executives opted to make good with their own shares.
"We are very pleased that the perpetrators of this crime have been brought to justice," said president and chief executive Robert Webber. "As we've stated over the past couple of months ... MindArrow was the victim of a very clever scheme in which no one at the company was involved."
Through its acquisition of Control Commerce, MindArrow also gains its $1 million cash war chest -- which will be helpful in offsetting a bit of the losses incurred through the stock scheme.
"Because the shares were taken directly from the company and sold, money that should have come to MindArrow was misappropriated by Bardasian and Daly," Webber said. "Thankfully, our employees, clients and key shareholders have stood by the company in spite of this distracting situation. We now look forward to putting the entire episode behind us and concentrating on building our business."