The Securities and Exchange Commission secured a judgment this week against a concert promoter charged with defrauding investors to promote Christian music concerts and festivals in the New England area.
Jeffrey E. Wall, 56, and his business, The Lighthouse Events, defrauded investors he solicited to become “financial partners,” according to the SEC’s complaint. From approximately January 2014 through October 2018, Wall and Lighthouse raised more than $3 million from approximately 145 investors, the SEC said.
Judge John H. Rich III ordered Wall and Lighthouse to pay, jointly and severally, $1,589,815 in disgorgement of ill-gotten gains plus $202,056 in prejudgment interest thereon, and individual civil penalties of $1,589,815 against Wall and $1,589,815 against Lighthouse.
Funds Used For Other Expenses
Many of the investors Wall pitched to were those who shared his religious views, the SEC said in its April 2019 complaint. He promised investors that their funds would be used solely to promote and host Christian music concerts and festivals and that their investments were “secured” and “guaranteed.”
“The Defendants’ actions also constitute what is known as an ‘affinity fraud,’ which refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities,” wrote David London of the SEC’s Boston Regional Office.
Wall promised a return on investment between 10% and 25%, the complaint said. In reality, Wall and Lighthouse used investor funds for a variety of other expenses, including payment of Lighthouse’s existing debt and payments to earlier investors.
“Wall also failed to disclose material information to potential investors, including Lighthouse’s deteriorating financial condition from declining ticket sales, its growing debt from cash advances, and its inability to repay investors as promised; neither Wall nor Lighthouse pledged any collateral and they had no assets or other way to repay investors if Lighthouse failed to generate a sufficient profit from ticket sales,” the SEC complaint reads.
Wall only repaid about half of what was pledged by investors, the SEC said.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at email@example.com. Follow him on Twitter @INNJohnH.
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