Did you wire money to Drew Morrison in return for shares in CityGuru, Inc.?  If you were led to believe you’re a CityGuru Shareholder please consider this Investor Advisory carefully:  all CityGuru Shareholders should carefully examine any and all documentation that entitles them to stock ownership.

CityGuru Shareholders are advised that while under oath in a recent Video-taped Deposition Founder Drew Morrison stated money he received as wire-in deposits were for personal “loans”.   For at least three of the investors he named who wired funds directly to him, this suggests they are “creditors” rather than shareholders.   They have confirmed that it was their understanding they were receiving shares of CityGuru, Inc. in return for the funds they wired into Morrison’s account.

Serious questions arise over how many other investors who thought they were receiving shares of stock in Morrison’s CityGuru, Inc. were unwittingly making personal loans to Drew Morrison.   Any investor who believes they assumed ownership of shares of CityGuru, Inc. when they gave money to Morrison should verify and confirm the validity of their claims by having any written agreements with Morrison reviewed by their attorneys or accountants.

This is particularly relevant considering during the same Deposition, Drew Morrison admitted to not keeping or owning corporate records or files for his venture, CityGuru, Inc.   The proper documentation and recording of an investor’s claim to stock ownership may be required to validate an investor’s entitlement as a corporate Shareholder versus a personal Creditor.

Considering that some CityGuru Investors received only email correspondence from Drew Morrison that vaguely addresses their right to stock ownership only complicates their determination of status between “Shareholder” and “Creditor”.

According to the U.S. Securities Exchange Commission (SEC) proof of stock ownership in a corporation is validated in one of three methods:

  1. Physical Certificates –The stock, or security, is registered in your name on the issuer’s (CityGuru, Inc.) books, and you receive an actual, hard copy stock or bond certificate representing your ownership of the security.
  2. “Street Name” Registration –The stock is registered in the name of your brokerage firm on the issuer’s (CityGuru) books, and your brokerage firm holds the security for you in “book entry” form.   “Book-entry” simply means that you do not receive a certificate. Instead, your broker keeps a record in its books that you own that particular stock.
  3. “Direct” Registration—The stock is registered in your name on the issuer’s (CityGuru) books, and either the company or its transfer agent holds the security for you in book-entry form. The “Direct Registration System” (also known as “DRS”) allow investors to transfer securities held this way.

Since Morrison-CityGuru keeps no books or records, Morrison stated the company’s stocks are kept and maintained by PERKINS COIE, Seattle whom is assumed to be CityGuru’s transfer agent. The CityGuru Investor should start with this source (contact information provided in the link) to verify and confirm his/her stock ownership in CityGuru, Inc.

You may also contact the SEC directly for questions and concerns with your CityGuru stock ownership.

Why should I be concerned whether my investment funds were used as a “Loan” to Drew Morrison or to purchase Shares in his CityGuru?

If the money you wired into Drew Morrison was, in fact, accepted and used as a “loan” then you are a “creditor”.  As a “creditor” you are assuming the same risks to your money as is a “Shareholder” but you are not entitled to the same Shareholder Rights.

Also in the event of bankruptcy or litigation, you may not be entitled to the same priority of claims as is a Shareholder. As a “Creditor” you have personal recourse against Drew Morrison only. As a “Shareholder” you may have recourse against the company, CityGuru and Drew Morrison as founder and officer of that company.

It can be argued that a Shareholder has more leverage in the likelihood of recouping their investment than does a Creditor.  So, your status and what that entitles you to as a CityGuru investor is vitally important.

Consult with your attorney or accountant and inspect your documentation for validation of stock ownership. These trusted advisors can help you towards obtaining the proper recording or documentation from Drew Morrison-CityGuru, Inc. that will soundly establish your identity as a CityGuru Shareholder.

Wish this could have been a more pleasant post, but it serves to keep shareholders advised as the news breaks.  Subscribe to email alerts as this is surely to be only one of many more posts to be released as the news breaks.  Please leave a comment.