Agora's marketing tactics bring success, accusations

Publisher: Accused of selling false insider information, Agora Inc. says the SEC is retaliating for a lawsuit.

April 19, 2003|By Paul Adams | Paul Adams,SUN STAFF

Baltimore publishing company Agora Inc. isn't in the business of subtlety.

The 25-year-old firm markets its 50 financial, travel and health newsletters with bombastic pitches that promise subscribers advice that will lead to riches and better living, or your money back. Guaranteed.

It's a hard sell designed to grab attention in a market crowded with big-name market gurus and forecasters, and it works. Agora's success has paid for founder and President William Bonner's chateau in France, and placed him and a few partners among the top five newsletter publishers in the United States.

"I would say what makes [Bonner] tick is creating and publishing ideas," said Myles Norin, chief executive of Agora's U.S. operations, which account for 60 percent to 70 percent of its sales. "It's not just chasing profits."

But the Securities and Exchange Commission says the company's aggressive tactics have pushed the legal envelope. In a complaint filed last week in U.S. District Court in Baltimore, the federal agency claims that Agora defrauded its readers last year by charging $1,000 for false insider information about USEC Inc., a Maryland company that supplies nuclear power plants with enriched uranium.

USEC said it never gave Agora editor Frank Porter Stansberry inside information and is cooperating with the SEC.

The allegation is part of a pattern of behavior at Agora that the SEC says goes too far. It is asking the court to order the company to stop making false statements in its newsletters and return profits of more than $1 million, among other things.

"We feel there is a need for the court to issue an injunction because we believe there is a likelihood they will do this again," said Ken Israel, an SEC attorney familiar with the case.

Agora denies the charges, saying the case is retaliation for a lawsuit the company filed against the SEC last year. Agora attorney Matthew J. Turner also says the complaint contains factual errors and won't hold up in court.

"We always give a 100 percent refund anytime for any of our products," he said. "It's disconcerting when the SEC is pushing for disgorgement [of profits] when we already voluntarily [do that]."

Headquartered in a historic Mount Vernon mansion, Agora is described by people familiar with the company as an entrepreneurial success story. The privately held company won't disclose numbers, but hundreds of thousands of people subscribe to its newsletters and annual sales could easily exceed $75 million, judging by industry estimates and Bonner's past interviews with media. The company says its sales have increased an average of 20 percent annually during the past 10 years.

Agora is best known locally for renovating a handful of rowhouse mansions in the Mount Vernon area, creating a business campus filled with original oil paintings, polished woodwork and leaded glass windows. The company contributes generously to community clubs, helping to revitalize the city's once-beleaguered Mid-Town Belvedere area.

`They're always there'

"They encourage their people to get involved," said Lisa Keir, executive director of the Mount Vernon Cultural District. "They're always there with a `yes' when you need something for Mount Vernon."

Bonner's career has been anything but traditional. The Annapolis native studied at the University of Maryland and the Sorbonne before flirting with a career in law. Looking for a job after college in the late 1970s, he linked up with a childhood friend, James Davidson, to form the National Taxpayers Union in Washington. It was during that time that Bonner discovered his knack for direct marketing.

"I discovered the world of direct-response advertising," Bonner told The Sun in a 1994 interview about his growing business. "That you could ask people for money in the mail and they'd send you some."

After several failed ventures, Bonner found success in 1979 with International Living, a newsletter filled with advice about overseas travel and real estate investing. Among other things, the newsletter achieved notoriety by ranking the best places in the world to live. Bonner marketed through direct mail and produced the newsletter with his wife, Elizabeth.

A few years later, Bonner, Davidson and Davidson's former college roommate, Mark Hulbert, started The Hulbert Financial Digest. That newsletter, which Agora has since sold, was sought for its ratings of other financial newsletters. That led to a major foray into investment newsletters, which make up a significant portion of Agora's portfolio today. Subscribers to the company's newsletters pay $39 to $99 for a subscription.

The company also owns the titles to more than 20 books, sells travel tours and investing seminars and owns about 3,000 acres in Nicaragua that it markets to members in one of its many franchises.

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