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