The son of John MacArthur, senior pastor at Grace Community Church California, has been accused of defrauding clients by the Securities and Exchange Commission (SEC).
Mark MacArthur, together with his wealth management company Criterion Management Insurance Services, Inc., allegedly failed to disclose financial conflicts of interest to clients when making investment recommendations.
The SEC claims MacArthur, Criterion and company co-owner Robert Gravette encouraged clients to invest over $16 million (£12.3m) into four real estate investment funds without disclosing that the fund managers had paid them more than $1 million in compensation.
The complaint, filed on 12th February, reads: “Criterion, Gravette, and MacArthur not only had a financial incentive to recommend that their clients invest in the first instance, they were also incentivised to keep their clients in the funds going forward, rather than allocating their capital elsewhere.
“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.”
MacArthur’s father, Pastor John MacArthur has lead the Sun Valley megachurch, Grace Community Church since 1969 which has an average weekly attendance of 8,258 people.
He is also the chancellor emeritus of The Master's University in Santa Clarita, where both Gravette and Mark MacArthur studied in the 1980s.
The SEC complaint alleges that the pair had historical ties to one of the fund managers in the case who also attended the university.