Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
ThinkAdvisor
a church

Regulation and Compliance > Federal Regulation > SEC

SEC Charges Pastor-Turned-Advisor With $2.4M Fraud

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • The advisor allegedly sold phony notes in an effort to buy a faith-based marketing company.

A former pastor in Tennessee who promoted a “faith-based” investment approach to Christian clients through his registered investment advisory faces Securities and Exchange Commission civil charges that he sold over $2.4 million in fraudulent promissory notes to at least six people.

Without admitting or denying the allegations, Donald Anthony Wright, 54, of Cookeville has consented to an injunction permanently barring him from buying or selling any security, with certain exceptions, and to a permanent bar from serving as a public company officer or director.

In a civil complaint filed Tuesday in U.S. District Court in Tennessee, the SEC alleges Wright and his registered investment advisory firm, Retirement Specialty Group Inc., recommended and sold the phony notes from June 2021 to July 2023.

In promoting and selling the notes, some of which promised monthly interest of up to 20%, the SEC alleges, Wright, a former senior church pastor, misled investors regarding the nature and safety of the investments.

Wright falsely told investors — at least five advisory clients and one other person — the notes were secured by real estate, that investing in them was safer and more stable than stock market investments,  and that he personally had invested significant funds in the notes, the SEC alleges.

After selling the notes, Wright misappropriated most proceeds for his own personal benefit and lied to the investors about the notes’ repayment status, the complaint alleges. He raised this money, at least partly, to support his efforts to acquire a faith-based media marketing company, the complaint alleges.

After one note defaulted, Wright fabricated an $8.1 million wire-transfer confirmation to falsely assure a client that repayment was forthcoming, the SEC alleges.

The complaint also alleges that Wright failed to disclose his business and financial ties with note issuers, creating conflicts of interest, and contends he obtained investor funds by creating and using fake, forged promissory notes.

The complaint accuses Wright and the firm with violating the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940, charging them with six counts of fraud.

Wright promoted his firm through a SiriusXM talk show, podcasts and written materials, according to the lawsuit. Most photos of the management team on one note issuer’s website actually were stock photos, not company employees, the SEC alleges.

He also falsely represented that one note issuer had ties to Morgan Stanley, the complaint contends.

The court will determine the amount of disgorgement, prejudgment interest and penalties that Wright and the firm must pay.

The Financial Industry Regulatory Authority BrokerCheck database lists Wright as a former broker and investment advisor with six years experience and four previous firms from 2008 to 2015.

He was permitted to resigned from Silver Oak Securities in 2015 over allegations he failed to follow firm procedures regarding advertising, according to FINRA.

Wright owns Retirement Specialty Group with his wife and serves as its chief compliance officer, according to a January brochure filed with the SEC.

Image: Adobe Stock


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.