SEC charges former Cookeville investment company with fraud

The Securities and Exchange Commission this week charged Cookeville resident Donald Anthony Wright and his company, Retirement Specialty Group, Inc., an SEC-registered investment adviser, with defrauding several investors.

According to the SEC's complaint, Wright primarily targeted Christian clients by promoting his and Retirement Specialty Group's "faith-based" approach to investing. Between approximately June 2021 and July 2023, Wright and Retirement Specialty Group allegedly recommended and sold over $2 million in fraudulent promissory notes to at least five advisory clients and one other investor. In recommending and selling these notes, some of which promised monthly interest of up to 20%, Wright allegedly misled investors concerning the nature and safety of investing in the notes.

For example, Wright allegedly claimed that: the notes were secured by real estate; investments in the notes were safer and more stable than investments in the stock market; and Wright personally had invested substantial funds in the notes. According to the complaint, all of these claims were false.

The complaint further alleges that, after selling the notes, Wright misappropriated most of the note proceeds for his own personal benefit and then lied to the investors about the repayment status of the notes. For example, after one of the notes defaulted, Wright allegedly fabricated an $8.1 million wire-transfer confirmation that he gave to a client to falsely assure him that repayment of his note was forthcoming.

Wright also allegedly failed to disclose his business and financial ties with the issuers of the notes, which created conflicts of interest. Notably, the complaint claims that, on at least three occasions, Wright obtained investor funds by creating and using fake promissory notes that were not issued by any company.

The SEC's complaint, filed in the United States District Court for the Middle District of Tennessee, charges Wright and Retirement Specialty Group with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Without admitting or denying the allegations in the SEC's complaint, Wright and Retirement Specialty Group each consented to the entry of an order permanently enjoining them from violating the charged provisions and authorizing the Court to determine at a later date the amount of disgorgement, prejudgment interest, and civil money penalties that each defendant shall pay. Wright also consented to a permanent officer-and-director bar and to an injunction that permanently bars him from participating in the issuance, purchase, offer, or sale of any security, subject to certain exceptions.

Investors should be aware that many fraudsters try to take advantage of the trust that having something in common creates, such as a common religion. The SEC's Office of Investor Education and Advocacy has issued an Investor Alert with tips on how investors should be wary of making decisions based solely on common ties with someone recommending or selling the investment.

Retirement Specialty Group had offices located on Perimeter Park Drive in Cookeville now occupied by a company called Creekmur Wealth Advisors.

"In [May] 2024 Creekmur Wealth Advisors purchased certain assets of Retirement Specialty Group," the company says on its website. "Creekmur Wealth Advisors is not affiliated with Retirement Specialty Group nor its owner, Donald Anthony Wright. Creekmur Wealth Advisors is not a party to the complaint and had no association with, or knowledge of, any of the matters that are the subject of the complaint."