The son of Pastor John MacArthur has been charged with fraud.
Mark MacArthur, who is the son of famed Pastor John MacArthur, who leads Grace Community Church in California, has been charged by the Securities and Exchange Commission of defrauding their advisory clients.
The Securities and Exchange Commission has said that MacArthur, 52, and Criterion Management Insurance Services, Inc., breached their fiduciary duty and defrauded their clients by failing to disclose significant financial conflicts of interest when recommending investments in private real estate investment funds. The SEC's complaint alleges that MacArthur recommended that their advisory clients invest more than $16 million in four private real estate investment funds without disclosing that from 2014 to 2017 the fund managers had paid them more than $1 million.
The complaint states: "Because this additional side compensation was recurring and depended on Criterion's clients remaining invested in the subject funds, Criterion, Gravette, and MacArthur not only had a financial incentive to recommend that their clients invest in the first instance, they were also incentivized to keep their clients in the funds going forward, rather than allocating their capital elsewhere. For two of the private placement funds, the undisclosed compensation that defendants received reduced the investment returns that defendants' advisory clients would have otherwise received."
It continues: "Defendants 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. What's more, these undisclosed compensation arrangements rendered Criterion's Form ADV filings with the Commission materially misleading, and no policies and procedures had been adopted and/or implemented at Criterion to prevent these compliance failures."
MacArthur is one of four sons of Pastor MacArthur who currently also serves as Chancellor Emeritus of The Master's University.
Pastor John MacArthur was president of TMU from 1985 until he transitioned to his present role at the end of June 2019.
