The son of one of America’s most prominent preachers has been charged with fraud, according to Securities and Exchange Commission (SEC) filings.
Mark MacArthur, whose father John MacArthur is the senior pastor at Grace Community Church in California, has been charged with Failure to Disclose Financial Conflicts of Interest at Criterion Wealth Management Insurance Services, Inc.
It is alleged he and Robert Allen Gravette have been charged with breaching their fiduciary duty and defrauding clients when it recommended investments in private real estate investment funds. The company is based in Santa Clarita, California. Both MacArthur and Gravette are reportedly co-owners of the firm.
The SEC claims that MacArthur and Gravette encouraged clients to invest over $16 million into four real estate investment funds without disclosing that the fund managers had paid them more than $1 million in compensation.
“The Securities and Exchange Commission charged Criterion Wealth Management Insurance Services, Inc., a Santa Clarita, California, investment advisory firm, and its then co-owners Robert Gravette and Mark MacArthur, also of California, for breaching their fiduciary duty and defrauding their advisory clients by failing to disclose significant financial conflicts of interest when recommending investments in private real estate investment funds,” the statement read.
“The SEC’s complaint alleges that from 2014 to 2017 the defendants recommended that their advisory clients invest more than $16 million in four private real estate investment funds without disclosing that the fund managers had paid them more than $1 million, which was on top of the fees that defendants were already charging their clients directly. The complaint further alleges the defendants were incentivized to keep their clients invested in the funds, rather than allocate their capital elsewhere, because the additional side compensation was recurring and depended on Criterion’s clients remaining invested. For two of the funds, this undisclosed compensation arrangement resulted in reduced investment returns for the defendants’ advisory clients.
“The SEC’s complaint, filed in the U.S. District Court for the Central District of California, charges Criterion, Gravette, and MacArthur with violating the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC’s complaint further charges Criterion and Gravette with violations of Section 207 of the Advisers Act, and Criterion with violations of Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder. The complaint also charges Gravette and MacArthur with aiding and abetting Criterion’s violations of Sections 206(1) and 206(2) of the Advisers Act and Gravette with aiding and abetting Criterion’s violation of Section 207 of the Advisers Act. The complaint seeks permanent injunctions from future violations of these provisions, disgorgement and prejudgment interest, and civil penalties from all defendants.”
The SEC complaint alleged that the pair had historical ties to one of the fund managers in the case who also attended the university.
John MacArthur made headlines in the Christian community last year when, on being asked what he thought of women preachers like Beth Moore, he suggested that she should “go home”.
Moore responded on Twitter last October, “I did not surrender to a calling of man when I was 18 years old. I surrendered to a calling of God. It never occurs to me for a second to not fulfill it. I will follow Jesus – and Jesus alone – all the way home.”
He eventually responded to criticism while preaching at his church, telling his congregation that, “it is improper for a woman to speak in church.” He went on to say that the Bible describes it as “disgraceful.”
MacArthur’s California megachurch has more than 8,000 people attend it each week.
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