Mark MacArthur, son of famed pastor John MacArthur, has been charged by the Securities and Exchange Commission for Failure to Disclose Financial Conflicts of Interest to their clients. According to the SEC filing, MacArthur and his former partner, Robert Gravette, advised their clients to invest in private real estate investment funds that were paying the advisers at the time. Their former company, Criterion Wealth Management Insurance Services, Inc., allegedly had a relationship with the investment fund that benefited from their recommendations.
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.
These are currently only charges and MacArthur is due his day in court. But if these charges stand, it says a lot about both the younger MacArthur and his pastor father. No human is perfect. We all stray regularly and fall short of the glory of God. But this is not a case of someone speaking harshly to a store clerk or cutting in front of someone in traffic. These are serious financial crimes that cost other people money. According to the complaint, MacArthur was essentially “double-dipping” by accepting money from a company in exchange for recommending that company to clients who were also paying them.
But the elder MacArthur has proven to be like Teflon over the years. He is extremely popular among his congregation at Grace to You and is respected as one of the most prominent pastors in America. He’s a living legend among Calvinistic Baptists. For these and other reasons, any time his theology, sermons, or associations are called into question, his defenders quickly pounce to quash the objections.
We experienced this “strong arm of the church” when we published an article accusing John MacArthur of lying about the events surrounding the assassination of Martin Luther King Jr. Comments on social media and directly towards the author of the article were nothing short of heinous, and I personally received two phone calls from members of MacArthur’s group that were cordial but aggressively pressing for me to take down the article. We did not.
The sins of the son do not bring punishment to the father in this world, but there must be questions asked of a man charged to lead a congregation towards the light if his own son is accused of dwelling in darkness. The severity of the charges must not be overlooked. $16 million dollars is not chump change and the accusations point to willfully misleading people to receive lesser gains while the company and the partners made greater gains. It isn’t just dishonest. It’s harmful.
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The church is already under attack in America and abroad. Scandals that attach to one church are fodder for militant anti-Christian groups to attack all churches. In our post-truth society, the last thing the faithful need is another reason for our religious leaders to labeled as hypocrites. The lies against us are bad enough. When there’s truth to the wrongdoings of religious leaders and their seeds, it works against our calling to spread the Gospel.
According to Christian Post, the people involved had another connection to John MacArthur:
MacArthur is one of four sons of Pastor MacArthur who currently also serves as Chancellor Emeritus of The Master’s University. Pastor MacArthur was president of TMU from 1985 until he transitioned to his present role at the end of June 2019.
The complaint says Gravette and MacArthur were long-time social acquaintances of one of the unidentified fund managers in the case dating back to the 1980s, when they attended the same university. MacArthur attended The Master’s University.
We must all hold to a higher standards as citizens of this world and future citizens of the next. It is incumbent on John MacArthur to address this issue regarding his son. Perhaps that time can wait until after Mark MacArthur is either convicted or exonerated, but it must come at some point. Silence and deflection are not acceptable in this instance.
As Christians, we must expect the highest levels of integrity from not only our church leaders, but also their family. There are plenty of false accusations made against Christian leaders. We do not need real accusations to muddy the waters further.