Key point 9-04. Federal and state laws regulate the offer and sale of securities for the protection of the investing public. In general, an organization that issues securities must register the securities, and the persons who will be selling the securities, with state and federal agencies. In addition, federal and state laws contain a broad prohibition on fraudulent activities in the sale of securities. Churches are exempt from some of these requirements in some states. However, they remain subject to the prohibition of securities fraud in all 50 states, and under federal law.
A California appellate state court found a pastor guilty of securities fraud for swindling his congregation, among others, out of nearly $1 million dollars in an investment scam.
Family and church members invested nearly $1 million
A pastor taught finance classes to church members and came to know and advise many of them. ...