Budderfly: Exposed with the Allegations of SEC (2023)
Budderfly is a unique company that offers Energy-as-a-Service. However, their leadership has a crooked history, particularly their CEO, Al Subbloie. He was fined by the SEC for disclosing fake revenue to investors and stakeholders just a few years ago.
Subbloie is using deceptive marketing tactics to distract consumers from his shady history.
So, before you start doing business with this Shelton-based company, it would be best to understand their past. This way, you can make a better-informed decision:
What is Budderfly?
Budderfly is a service provider that helps businesses set up efficient energy management solutions. The company claims to remove all the financial hurdles related to energy usage and pollution. They combine upgrades, constant monitoring and maintenance to provide businesses with energy savings.
Their office is located at 2 Trap Falls Rd #310, Shelton, CT 06484, US which opens from 7:30 AM to 5 PM on weekdays.
The contact number of this firm is 855-299-1334.
At first, Budderfly seems like an ordinary firm with a lot of potential. They have a unique Energy-as-a-Solution model which might attract various investors. But if you look at the history of its leadership, you’ll soon realize that the firm has a ton of skeletons in its closet.
The CEO of Budderfly is Al Subbloie. He is also the founder of this firm. Other prominent people at this company are Paul Schmidt (VP Customer Management) and Peter Dacey (CFO).
The leadership of Budderfly Inc. faced multiple lawsuits in the past because of its last venture, Tangoe Inc. Here’s how the Budderfly CEO faced disciplinary action from the SEC for scamming investors:
Truth About The Budderfly CEO: $1.5M Fine By SEC
Before founding and running this energy-saving company, Al Subbloie used to run Tangoe Inc. It was a telecommunications expense management company and the SEC had charged it for using fraudulent accounting practices.
The finance watchdog found that Subbloie’s company was using fraudulent accounting practices to boost its revenue artificially between 2013 and 2015.
Apart from the company, SEC charged four former members of the company’s upper management including the ex-CEO, Al Subbloie.
According to the complaint, Tangoe Inc was a public company that improperly recognized around $40 million of revenue out of the total $556 million reported between 2013 and 2015.
The Saas provider was reporting revenue prematurely for work that it hadn’t yet performed, including service pre-payments, and for transactions that didn’t produce any revenue.
Also, a Tangoe executive falsified business records to give to the external auditors to support revenue recognition decisions.
The SEC had filed its complaint in Connecticut federal court charging the firm and Al Subbloie, who is now the CEO of Budderfly.
To avoid further arbitration, Al and his fellow Budderfly executives settled the matter and agreed to pay $1.5 million+ in a settlement. Tangoe had paid $1.5 million while Al had paid $100,000 additionally to settle the case.
The Securities and Exchange Commission (SEC) requires public companies, certain company insiders, and broker-dealers to file periodic financial statements and other disclosures. Finance professionals and investors rely on SEC filings to make informed decisions when evaluating whether to invest in a company.
Keep in mind that this matter is relatively recent. SEC had filed the case in September 2018 and at the time, Al Subbloie had already started Budderfly.
This was a textbook case of investor fraud. Al and his business partners showed fake revenue generating transactions to pull wool over their investors’ eyes. Now, he is running a similar company with a business model that resembles Tangoe’s model.
Al has a long history of taking advantage of investors and stakeholders. The SEC’s complaint is the most recent dispute he has had but it is not the only one.
The Lawsuit Against Al Subbloie (AKA Albert R. Subbloie): Stein vs. Tangoe Inc
Before facing a complaint directly from the SEC, Al Subbloie faced a class-action lawsuit from its investors in 2014 for scamming them.
The lawsuit was against Al, the executive team, and the firm Tangoe. Stein, the plaintiff of the lawsuit, complained that Tangoe was misinforming investors about its generated revenue and growth.
Stein pointed out in his lawsuit that investors usually expect at least 20% annual organic growth for SaaS companies to be considered profitable. He complained that Tangoe understood the importance of this benchmark and misled investors about its actual growth numbers.
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They did so by acquiring five companies within a small time frame. Because of so many acquisitions, investors couldn’t determine if the new revenue numbers were because of the company’s organic growth or just because of the newly acquired firms.
Furthermore, Tangoe didn’t release its annual organic growth numbers after these acquisitions. They only shared “estimates” of their annual organic growth. Stein complained that these “estimates” were highly inflated and were nowhere close to the actual numbers.
Various analysts revealed that Al Subboie’s company was growing mainly because of its acquisitions and there was very little organic growth whatsoever. They were underreporting the revenue contribution from acquisitions and misrepresented the organic growth of the firm.
While the court dismissed the lawsuit, Al had to face a more serious complaint later by the SEC itself. He and his business partners ended up paying millions in fines to the industry watchdog.
The Budderfly CEO has a terrible history as an entrepreneur. He has spent most of the last decade running a company that was scamming its investors. Now, he is running another company that has a similar business model.
You can learn more about the lawsuit here: Stein v. Tangoe.
How Budderfly Is Using Paid PR To Hide Their Dirty Laundry
The leadership of Budderfly has a shady past. But in order to gain new customers and investors, they try their best to hide this crooked past by paying third-party blogs and PR sites.
If you google “Budderfly PR”, you’ll see a ton of articles praising this company:
These paid articles help Budderfly in distracting consumers and investors from the crooked history of its owners. After all, can you trust a company whose CEO was fined for defrauding investors?
Keep in mind that the business model of Budderfly and Tangoe Inc are quite similar. One offers Energy-as-a-Solution while the other offers Software-as-a-Solution.
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Still, using such suspicious tactics to promote itself doesn’t seem like a good strategy. It shows that the company has a lot to hide and wants to mislead consumers into trusting itself.
If a person can show fake revenue to investors, they can certainly use other unethical tactics to grow their business.
Employees Complain About Budderfly
This is an employee review of the EaaS company. It highlights that Budderfly is quite an unstable organization because of its poor management and micromanagement issues.
The reviewer points out that the firm has rampant favoritism and staff members get thrown into a position. Moreover, the demands are greater than spoken about. The constant micromanagement from the leadership makes matters worse and staff doesn’t get any opportunity to take ownership without constant criticism.
In the “Advice to Management” section, the reviewer says that the management needs to be able to adapt to different kinds of personalities.
Budderfly Doesn’t Listen to Any Criticism (Customer Review)
Henry complains that the company sold him a bad product even though he’s a long-time customer. Moreover, instead of accepting their fault, the company defended the bad batch they had sent to the customer.
Henry points out that the company wasn’t very nice about the complaint even though he only complained about one out of a dozen products.
Since then, Henry stopped using their services. He suggests working with someone else and doesn’t recommend Budderfly.
It’s evident from this review that Budderfly doesn’t care much about its customer service. You should be wary of such companies and enterprises as it means you can’t trust them if any issue arises.
For example, Overlake Reproductive Health is a fertility clinic that harasses clients and insults them if they share their negative experiences online. The clinic thinks the customer will remove their complaint if they will harass them constantly.
Budderfly Review: Conclusion
It’s obvious that Budderfly isn’t as reliable as it wants to seem like. The company has poor employee reviews and customer reviews. On top of that, their CEO paid $100,000 to the SEC and his company paid $1.5 million+ for lying to investors.
Due to these reasons, it wouldn’t be okay to trust this venture. You should avoid dealing with them.
Al Subbloie, the CEO of Budderfly paid $100,000 in fines to the SEC for lying about his company’s revenue. His last company had to pay $1.5 million in fines as well. With such a crooked history, it wouldn’t be wise to trust his latest venture blindly. It would be better to avoid Budderfly.
- Shady history of the CEO
- Deceptive marketing practices