A complaint was filed against Mark MacArthur, son of evangelical pastor and radio host John MacArthur, alleging the younger MacArthur and his former business partner defrauded clients in a $16 million investment scheme.
The Securities and Exchange Commission on Feb. 12 charged the California-based investment advisory firm Criterion Wealth Management Insurance Services and its then co-owners Mark MacArthur and Robert Gravette with failing to reveal financial conflicts of interest when recommending certain investments to their clients between 2014 and 2017. MacArthur left the company in 2017.
MacArthur and Gravette encouraged their clients to invest more than $16 million in four private real estate investment funds without notifying them that the fund managers for these investments had paid them more than $1 million in side compensation, according to the complaint that was filed in U.S. District Court in California. This was on top of the fees that the business partners were already charging their clients.
Both Gravette, 54, and MacArthur, 52, were longtime social acquaintances of one of the fund manager's principals, "dating back to the 1980's, when they attended the same university," the complaint reads.
According to the complaint, MacArthur and Gravette were financially encouraged to keep their clients invested in the funds, instead of issuing their capital elsewhere, "because this additional side compensation was recurring and depended on Criterion's clients remaining invested in the subject funds."
For two of the private placement funds, the undisclosed compensation reduced the investment returns their clients would have otherwise received, according to the complaint.
MacArthur and Gravette "kept their clients in the dark as to all these material facts and, in doing so, they violated their fiduciary duty and defrauded their advisory clients," the complaint reads.
The complaint seeks permanent injunctions prohibiting future violations of the federal securities laws. It also calls for civil penalties and an order requiring MacArthur and Gravette to expel "their ill-gotten gains" with interest.
MacArthur and Gravette are both alumni from Master's University, where John MacArthur was the longest-serving president and is now the chancellor emeritus.
The Associated Press/© 2020 Religion News Service. All rights reserved.
To contact us or to submit an article, click here.
Get Charisma's best content delivered right to your inbox! Never miss a big news story again. Click here to subscribe to the Charisma News newsletter.
Five ways to deepen your relationship with God, increase your faith and save money!
- Deepen Your Relationship with God with a FREE eCourse: Click Here to view all of our free e-Courses. Favorite topics include Fear, Forgiveness, Holy Spirit, Supernatural, and How to Hear God.
- Super Discounts and Close-Out Specials: Click Here to view all our bundles and close-out specials and save up to 86%! Prayer, Holy Spirit, Anointing, the Supernatural and more.
- God Wants to Anoint Women Now: Rise up and enter the anointing of Deborah, Anna, Esther, Ruth and Hannah. You were called to go higher. Click Here to learn more.
- Change Your Atmosphere and Circumstances Through Prayer! John Eckhardt's prayer bundle gives you six powerful books to help you pray and change any situation. Click Here.
- HUGE Bible Sale!: Click Here to save up to 50% off a great selection of Bibles. Plus, get a free gift with each order!
Attention Pastors and Leaders: Leadership training and development are crucial for success. Enroll in a FREE 1-hour leadership mini-course by Dr. Mark Rutland. View Details