Religion rarely comes into account when making investing decisions. However, in the case of one church in California, the mixture led to fraud, losses, and a lawsuit. The church mandated participation in the courses: victims claim they were pressured by their religious leaders into taking investing direction from Paul Ricky Mata, a member since the church’s establishment.
Paul Ricky Mata had legal troubles dating back to 2009, with a securities license suspension in 2010. Mata’s licenses then expired in 2012, yet the Water of Life Church continued to employ him to teach members in mandatory courses, receiving “donations” from Mata as recompense. Church members who did research Mata’s background also discovered a history of previous sanctions by state regulators and an extensive disciplinary history, including nine FINRA disclosures. These bans were not disclosed to church members, and various promises of returns and “indestructible wealth” were made. No such returns were ever realized by investors who paid over $1,000,000.
Accusations of negligence against Mata and Waters of Life Church
Once members of the church realized that Mata’s guidance was, in fact, misleading and intended only for his own profit, a class action complaint was filed with the California Justice Department and the SEC. The lawsuit that was filed by the members of the Waters of Life Church specifies four specific complaints against Mata:
- Negligence: Duty of reasonable care as a financial advisor. Any financial advisor, investment broker, or other professional in this role owes specific duties to his or her clients, including duties of good faith and fair dealing, disclosure, and loyalty. Mata and his co-defendants allegedly promoted investments they knew to be unlikely to fit investors’ needs for the sole purpose of creating profit via fees.
- Negligence: Direct. This part of the complaint alleges that Mata was wildly unsuitable for the role of financial advisor to the members of the church and, furthermore, that the pressure put on church members to invest per Mata’s suggestions was negligent, given Mata’s extensive history of professional misconduct.
- Violation of California’s Consumer Legal Remedies Act. By allegedly not disclosing Mata’s tarnished reputation, the Waters of Life Church unfairly and deceptively imposed a safety risk on the public.
- Violation of California’s Unfair Competition Law. This code of conduct for businesses in California prohibits unfair, deceptive, or misleading advertising. Waters of Life Church allegedly concealed or failed to disclose Mata’s unsuitability for providing sound investment advice to members.
The Frankowski Firm has the experience to represent investors who have lost money as the result of stockbroker fraud or negligence. If you believe you have been a victim of investment fraud, call our attorneys at 888-741-7503 to discuss your potential legal remedies, or complete our contact form.