Mark MacArthur, son of Pastor John MacArthur y ex Gracia a ti board member, has agreed to pay more than $367,000 to the Securities and Exchange Commission (SEC) for his role in a $16 million investment scheme.
On Thursday, the SEC filed a proposed final judgment in a U.S. District Court in California, ordering MacArthur to repay more than $231,000 for profits gained through the investment scheme. The proposed order would also require MacArthur to pay nearly $24,000 in interest and a civil penalty of more than $110,000.
Also filed Thursday was consent by MacArthur to the financial judgment. In the consent, MacArthur also agreed to a permanent injunction against himself and employees of his new company, M2 Financial, “from receiving any compensation, beyond an advisory fee,” unless details of the compensation are disclosed to clients in writing. This disclosure would necessarily include the amount of the compensation, as well as any conflicts of interest.
The proposed judgment comes more than three years after the SEC alleged MacArthur, his former business partner, Robert Gravette, and the company they co-owned, Criterion Wealth Management, with fraud. The SEC also proposed a judgment for Gravette to repay about $123,000 in profits and interest, plus a civil penalty of about $111,000.* Criterion is no longer part of the case because Criterion dissolved.
Como El Informe Roys (TRR) previamente reportado, los queja de la SEC alleged that from 2014—2017, MacArthur and Gravette recommended that their clients invest more than $16 million in four private real estate investment funds. But the men failed to disclose “a glaring conflict of interest”—that the fund managers had paid MacArthur and Gravette more than $1 million. This was on top of fees that MacArthur and Gravette were charging their clients directly.
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The complaint further alleged that MacArthur and Gravette 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, the private arrangement resulted in investment losses for MacArthur’s and Gravette’s clients.
“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,” the SEC complaint stated. “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.”
The judgment this week stated that the repayment and fees are “a debt for the violation by Defendant of the federal securities laws or any regulation or order issued under such laws.”
The proposed judgment would permanently restrain MacArthur from engaging “in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client.”
For decades, Mark MacArthur served on the board of John MacArthur’s radio ministry, Grace to You (GTY). However, sometime between August 2020 y septiembre 2020, Mark MacArthur’s name was removed from the board of directors listed on GTY’s website. John MacArthur’s other son, Matthew MacArthur, remains on the GTY board and serves as treasurer of the ministry, which has an annual income around $33 million.
John MacArthur has historically taught that a church elder must have children who are “not involved in dissipation and rebellion” and “will never bring scandal upon his good name and the integrity of his spiritual leadership.” In the past, some elders at Grace Community Church have reportedly been asked to step down from leadership because of the misconduct of their children.
TRR reached out to John MacArthur and GTY Executive Director Phil Johnson for comment on the judgment against Mark MacArthur but did not immediately hear back.
*Our original story incorrectly reported that Gravette was no longer a part of the case.
Julie Roys es una reportera de investigación veterana y fundadora de The Roys Report. Anteriormente, también presentó un programa de entrevistas nacional en Moody Radio Network, llamado Up for Debate, y ha trabajado como reportera de televisión para una filial de CBS. Sus artículos han aparecido en numerosas publicaciones periódicas.
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it just keeps getting better. WARNING: if anybody from your church or Christian organization uses words such as “godly man” or “pillar of the community” or “son of a godly man” or has the fish or cross as a symbol for their business and wants your money! RUN. It is becoming so pathetic that the kids of these evangelicals are worst then anybody. Hello Fallwells. I have a new BFF for you.
Kids of evangelicals are hardly unique in their wayward ways. Peruse a bit of scripture and you can see the children of religious leaders bringing dishonor to their parents with their immorality. Every tradition has their wayward sons and daughters.
but Paul they are supposed to be above these things. ya know. the whole Jesus dude. And yes, they are unique. they live off tithes mommy and daddy make each Sunday and that isn’t for the use of pleasure and greed.
That has been going on since the days of Eli the priest. Even Billy Sunday had issues with his children and this is going back to early last century. As a pastor pointed out one time in light of his divorce troubles, ‘just because a man is a ‘man of God’ does not mean his wife is a ‘woman of God’ and this can apply to a pastors family or any ‘perfect godly man’. The bible states accurately that we (humans) are not righteous (Romans 3:10) at all and are prone to following the old man and that applies to pastor’s kids. Therefore always practise due diligence when entering transactions with others as humans can and will fail you and the body of Christ consist of entire Humans!
Well? It gives a whole new meaning to NEPOTISM! Which simply equates to CORRUPTION , FRAUD or simply the SONS of ELI!
Nothing new and has been addressed in the Bible just how serious God takes the human family hijacking or having PRESIDENCE over The Family of God!
The Shepherd or Senior Pastor will be held fully liable and accountable for such DECEIT and Arrogance in the Face of a HOLY and RIGHTEOUS God!
The wheel of justice moves slow but turns to fine powder under its wheels !
May the pulpit REPENT! God’s judgment has moved and moving upon the pulpit !
We must pray for these mega pastors for what we see in the pulpit we will also see in the pew !
His judgment will begin at the House of God and none will be spared from secret sin or corruption
What troubles me is that this “wheel of justice” you talk about seems to always be secular justice. God seems rather unable or unwilling to bring His miscreant and scofflaw followers to justice without secular authorities and government, and that observation doesn’t make sense to me.
While I’m not sure about the age. Mark definitely does not look like a child.
I don’t think that Bible verse refers to the pastor’s grown adult children. If the child is under the age of 18 then I think that verse would be more applicable. Kicking out an elder when their 30+ year old child becomes a criminal seems to not be the fault of the parent.
John MacArthur has long taught that an elder’s adult children must be believers and their life must reflect that belief and not bring scandal to their father.
Quote from MacArthur:
So a pastor, an elder, must be this kind of man, “above reproach” – back to Titus 1 – “a one-woman man and having children who believe, not accused of dissipation or rebellion.” Let’s look at that text now more specifically. … And generally speaking the tone of this text assumes them to be adult. … But primarily it’s associated with “not accused of dissipation or rebellion.” That hardly refers to little children. There aren’t too many dissipated, debauched little kids. That is a term which would more accurately be reflective of an adult life.”
For more, see this sermon: https://www.gty.org/library/sermons-library/56-6/the-required-character-for-a-pastor-family-leadership?fbclid=IwAR2JzY7VTimSvbG0Hgc27kUxtS_tnYqXgbXfMXmJMpqEyR0CKnWI1wS_IRc
Your article is in error. You state “For two of the funds, the private arrangement resulted in investment losses for MacArthur’s and Gravette’s clients.” That is a false statement. The SEC did not say clients lost money. The SEC complaint stated “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.” In other words in two of the investments the clients earned less (“reduced… returns”) than if they had invested into those funds through the other available investment structure. The other structure was a higher initial placement fee and no annual fee. Based on what was is not said, this also means that in two of the funds, the fee structure resulted in equal or higher returns than if the clients had invested via the other available investment structure.
You also are quoting the SEC complaint which is only one side. It says clients were in the dark. Other filings note that clients were made aware of the commission structure verbally. In the end the level of disclosure was deemed inadequate.
That the judgment did not ban him from the industry is quite interesting. Typically a person gets a ten year ban. It implies to me the case was a bit more gray and disputable.
Agreed as someone who’s wife works in securities. We need the old Paul Harvey say, “ …and now the rest of the story.” The punishment is not a reflection of the indictment. What is the other side?
As reported, there seems to be a complex disconnect between the language of the charges laid, and the penalties so far applied. The penalties appear light.
There may of course be further civil and/or criminal legal process to come.
It then seems that instances such as this one involving MM, are being worked to recategorise particular business practices as illegal, where previously they might have been viewed as known grey-area practices that sailed close to the regulatory wind (but were tolerated).
As such, there may be ethical overlap between what regulatory authorities and TRR are pushing for on their respective fronts of concern. I then wonder how deep a dive could be had, into the human dynamics of those two areas; perhaps to better illuminate both.
Nice try Tim. You have learned well from the master of making “a distinction without a difference” – MacArthur’s PR dude Phil Johnson. It’s like when Julie challenged Johnson about clearly and illegally doxing her by giving out her home address. The shucking and jiving and linguistic lingo Phil responded with was as shameful as it was reprehensible. I will expect nothing less coming out from the MacArthur damage control center regarding Mark MacArthur’s “violating of fiduciary duty and defrauded of advisory clients”. Stay tuned and be sure to wear your extra high boots!
It happens. No parent can control the behaviour of their fully grown adult child – even John Macarthur. It is the son’s responsibility and punishment to bear on his own. Ezekiel 18:20.
I am hoping and praying that he has learnt his lesson and has moved on.
It will be interesting to see how MacArthur’s Reformed Calvinistic Lordship soteriology plays out in the real world of imperfect people (including Chrisitians) in a fallen world. When MacArthur’s theology ignores grace and demands subjective performance in determining one’s eternal destinty, failure is not an option in the Christian life – including his own son. MacAuthur’s silence concerning his son is deafening.
This is a shameful satanic attack on Pastor John MacArthur and his family.
You intended to harm me, but God intended it all for good.
Continued blessings on the ministry of gty.org.
I fail to see how a story reporting documented facts is a “shameful satanic attack” on MacArthur and his family. Mark MacArthur should be held responsible for his actions, shouldn’t he?
It’s a known fact this family was targeted by those behind the “Plan-demic” – can’t have anyone causing problem by failing to kneel to the government. Yes, maybe there were things Mark’s business did that weren’t above board….or maybe didn’t know they weren’t. But what would be your best guess on how much other financial companies operate how Mark did on a regular basis and are never called out?
We all have sinned and have come short of Gods Glory, I am no Pastor nor do I look and Judge others or thier Kids, Johnny Mac has been very influentuel in my Christian life, I do not see eye to eye with him in a few things as any other top pastors I listen to. I would have to say 99% of well known Pastors will have kids that think on thier own every now and then, and when they do mistakes will be made, sin is in all of us folks , thank God for Grace, if Satan can deceive the holy Angels and have them Fall from Gods glory, look what Satan can do to carnel minded you and I and our kids. Paul stated he was a chief sinner, are we any different?