Subscription through SSO Client is broken

When user hits /<email address hidden> w/o prior Ubuntu One registration, he fails to be registered and his tokens are not transferred from Ubuntu SSO to Ubuntu One.

Here's the error:

SMTPRecipientsRefused: {u'None': (550, '5.1.1 <None>: Recipient address rejected: User unknown in local recipient table')}

    Traceback (most recent call last):
  Module /usr/lib/python2.6/smtplib.py, line 709, in sendmail
    raise SMTPRecipientsRefused(senderrs)
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/django/core/mail.py, line 186, in _send
    email_message.message().as_string())
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/django/core/mail.py, line 172, in send_messages
    sent = self._send(message)
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/django/core/mail.py, line 275, in send
    return self.get_connection(fail_silently).send_messages([self])
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/ubuntuone/web/email/__init__.py, line 277, in send_mail
    msg.send()
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/ubuntuone/web/email/__init__.py, line 54, in send_new_subscription_email
    'current_subs': current_subs}))
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/ubuntuone/web/email/__init__.py, line 64, in new_subscription
    send_new_subscription_email(subscription)
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/django/dispatch/dispatcher.py, line 148, in send
    response = receiver(signal=self, sender=sender, **named)
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/ubuntuone/dispatch/dispatcher.py, line 62, in send
    return DjangoSignal.send(self, *args, **kwargs)
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/ubuntuone/account/events.py, line 41, in new_subscription
    product_code=subscription.service_option.product_code)
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/ubuntuone/account/events.py, line 17, in _commit
    return func(*args, **kw)
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/ubuntuone/account/model/subscription.py, line 599, in create_subscription
    events.new_subscription(sub)
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/ubuntuone/web/oauth/views.py, line 364, in pull_data_from_sso
    subscription = model.subscription.create_subscription(user, free_plan)
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/django/core/handlers/base.py, line 86, in get_response
    response = callback(request, *callback_args, **callback_kwargs)
  Module /srv/ubuntuone.com/production/ubunet-rev-3315/utilities/../lib/django/core/handlers/wsgi.py, line 239, in __call__
    response = self.get_response(request)
  Module /usr/lib/pymodules/python2.6/paste/translogger.py, line 68, in __call__
    return self.application(environ, replacement_start_response)
SMTPRecipientsRefused: ' {u'None': (550, '5.1.1 <None>: Recipient address rejected: User unknown in local recipient table')}'

For end user this looks like he has successfully registered but ubuntuone-preferences still does not show the account info. Syncdaemon won't connect causing AUTH_FAILED. Filing a bug in ubuntu-sso-client since it looks like there is no UI notification about failed ping at all.