John MacArthur’s Son to Pay SEC $397K to Settle Financial Fraud Case
The case alleged conflict of interest at Mark MacArthur’s investment advisory firm.
Megachurch Pastor John MacArthur’s son Mark MacArthur has agreed to pay more than $367,000 to the U.S. Securities and Exchange Commission to settle a 2020 complaint filed against him, his investment advisory firm and then co-owner Robert Gravette for failing to disclose significant financial conflicts of interest when recommending investments in private real estate investment funds.
Mark MacArthur / Twitter
The SEC’s complaint, filed in the U.S. District Court for the Central District of California in February of 2020, charged Gravette, MacArthur and their Santa Clarita, California-based company Criterion Wealth Management Insurance Service Inc. with violating the antifraud provisions of the Investment Advisers Act of 1940.
MacArthur and Gravette were charged with breaching their fiduciary duty and defrauding their advisory clients by recommending that their advisory clients invest more than $16 million in four private real estate investment funds between 2014 and 2017 without disclosing that the funds’ managers had paid them more than $1 million in addition to the fees they were already charging their clients.
The complaint called the side compensation an incentive for the defendants to keep their clients invested in the funds, because the extra payments depended on the clients remaining invested. The SEC said clients who invested in two of the funds lost money.
In the final judgment, Mark MacArthur was ordered to pay $367,332.84 to the SEC within 30 days.
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He accepted the court’s judgment in a statement of consent “without admitting or denying the allegations of the complaint” and agreed to refrain from receiving compensation beyond an advisory fee paid by or on behalf of a client from an advisory client’s purchase or sale of securities or other investment products unless the additional amount was disclosed in writing.
Mark MacArthur is one of four children of John MacArthur, pastor of Grace Community Church in Sun Valley, California, Chancellor Emeritus of The Master’s University and Seminary, and featured teacher with the Grace to You media ministry.
