A Tennessee-based advisor touting a “faith-based investing” technique is dealing with SEC expenses that he defrauded a number of shoppers out of tens of millions.
The fee filed its criticism in opposition to Cookeville, Tenn., resident Donald Anthony Wright and his SEC-registered agency Retirement Specialty Group in Tennessee federal court docket Monday.
Wright was the president and CEO of RSG, which he co-owned along with his spouse and has been SEC-registered since 2002. The agency’s managed property totaled roughly $26.8 million. RSG marketed its method as faith-based, and most of its shoppers have been Christian. Based on the criticism, Wright was previously Senior Pastor of Religion within the World Church and sometimes promoted his advisory enterprise via a SiriusXM discuss present and podcasts.
Based on the SEC, in 2021, Wright needed to purchase a Christian-focused, Texas-based media advertising and marketing firm representing a number of “distinguished Christian pastors and evangelists.” The value was $20 million, and Wright was unwilling (or unable) to seek out “conventional” funding sources, based on the criticism.
Wright quickly made contact with a minimum of three be aware issuers that supplied to assist him safe financing to buy the media firm; one issuer stated it will mortgage Wright about $500,000 however provided that Wright bought $1 million of the issuer’s promissory notes to buyers, which might function collateral for the mortgage. Different issuers stated they’d solely float the financing for Wright if he offered some capital, based on the SEC.
At factors, Wright bought cast promissory notes not approved by the issuer; of the $2.42 million in promissory notes Wright bought, about $950,000 consisted of three cast notes he bought to 2 advisory shoppers and one different investor, based on the SEC. However Wright continued to present his shoppers false statements, together with that the notes have been “safer and extra steady” than the inventory market.
“In lots of situations, Wright knew these statements have been false,” the criticism learn. “For instance, Wright knew that he would ship a considerable quantity of funding proceeds to abroad financial institution accounts in trade for guarantees that Wright would rapidly obtain a whole lot of tens of millions of {dollars} in financing to buy the faith-based media advertising and marketing firm.”
Wright by no means disclosed the danger of the notes, and by now, the notes which have change into due are in default, based on the SEC, who claimed that not one of the buyers have gotten again any of their principal or curiosity.
Wright supplied varied defenses for why this was, together with that the cash was “tied up in England” and that governments wanted to make sure “the cash is clear and no terrorists have been concerned.” He additionally argued the non-payment was because of the SEC’s investigation, based on the criticism.
Moreover, final September, Wright advised a minimum of one consumer that RSG was about to obtain an $8.1 million wire switch, which Wright would use to repay the consumer. He hooked up a wire switch affirmation to the message.
“In actuality, the wire switch affirmation was pretend, having been altered by Wright,” the criticism learn. “RSG by no means obtained the $8.1 million.”
An legal professional for Wright didn’t reply to a request for remark previous to publication.
Based on an SEC press launch, Wright agreed to a everlasting officer-and-director bar and to be banned from collaborating within the buy or sale of securities in sure situations. Nonetheless, there was no further settlement order indicating this instantly out there, and the SEC didn’t reply to requests to make clear. Along with the bars, Wright consented to pay disgorgement, prejudgment curiosity and civil penalties, which will likely be decided at a later date, based on the SEC’s launch.
In June, the SEC launched an investor alert urging shoppers to be cautious of “affinity frauds,” wherein the fraudsters are (or declare to be) members of the group they’re concentrating on. Notably, the fee warned fraudsters may goal a spiritual group, together with “a specific denomination or church.”
