SEC v. JOHN DOE, No. 2:19-cv-00139-LEW, District of Maine (Apr. 4, 2019) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE

        )
SECURITIES AND EXCHANGE COMMISSION,  )
        )
    Plaintiff,   ) Civil Action No.
 v.       )
        )
JEFFREY E. WALL      )  JURY TRIAL DEMANDED
and THE LIGHTHOUSE EVENTS, LLC   )
        )
    Defendants,   )

    )
        )

COMPLAINT

Plaintiff Securities and Exchange Commission (the “Commission”) alleges the following

against Defendants Jeffrey E. Wall (“Wall”) and The Lighthouse Events, LLC (“Lighthouse”):

SUMMARY

1. This case involves a securities offering promoted through false and misleading

representations by Wall and his entity Lighthouse, which describes itself as a ministry located in

Freeport, Maine that hosts Christian music concerts and festivals.  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.  In this case, the

Defendants defrauded investors who shared Wall’s religious views.

2.  Between early 2014 and October 2018, Wall and Lighthouse raised more than $3

million from approximately 145 investors through a promissory note program. Wall intentionally

made false representations to entice investors and hid the risks associated with the investment.  The

promissory notes in this case are securities that are subject to the federal securities laws enforced by

the Commission.

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3. Wall falsely told potential investors that the funds entrusted to him would be used

solely to promote and host Christian music concerts and festivals.  He claimed that repayment was

“secured” and “guaranteed” within 12 months of the initial investment, with a fixed return ranging

from 10% to 25%.  Instead, Wall used investor funds for other expenses, including payment of Wall

and Lighthouse’s high-interest debt from cash advances and payments to earlier investors using later

investors’ money.  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.

4. Wall and Lighthouse quickly fell into arrears with investors; by the end of the four-

year scheme, Defendants had only repaid approximately half of the $3 million in principal solicited

from investors.  As a result, Wall and Lighthouse have failed to repay approximately $1.6 million of

the monies fraudulently collected from investors.

NATURE OF THE PROCEEDING AND RELIEF SOUGHT

5. The Commission brings this action pursuant to the authority conferred upon it by

Section 20(b) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77t(b)] and Sections

21(d) and 21(e) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§78u(d) and

78u(e)].  The Commission seeks permanent injunctions against Wall and Lighthouse, enjoining them

from committing further violations of the relevant provisions of the federal securities laws; entry of a

permanent injunction prohibiting specific conduct by Wall and Lighthouse related to the violations

alleged; disgorgement of all ill-gotten gains from the unlawful conduct set forth in this Complaint,

together with prejudgment interest; civil penalties pursuant to Section 20(d) of the Securities Act [15

3

U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]; and such other

relief as the Court may deem appropriate.

JURISDICTION AND VENUE

6. The Court has jurisdiction over this action pursuant to Sections 20(b) and 22(a) of the

Securities Act [15 U.S.C. §§ 77t(b) and 77v(a)], and Sections 21(d), 21(e), and 27 of the Exchange

Act [15 U.S.C. §§78u(d), 78u(e), and 78aa].

7. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C.

§ 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §78aa], because Wall and Lighthouse

reside and transact business in the District of Maine, and many of the acts, practices, transactions,

and courses of business alleged in this Complaint occurred within the district.

8. Defendants have, directly or indirectly, made use of the means and instrumentalities

of interstate commerce, of the mails, or of the facilities of a national securities exchange in

connection with the acts, practices, and courses of business alleged in this complaint.

9. Defendants’ conduct took place in connection with the offer and/or sale of securities.

DEFENDANTS

10. Jeffrey E. Wall, age 55, is a resident of Freeport, Maine.  Wall is the founder and

sole member of The Lighthouse Events, LLC.

11. The Lighthouse Events, LLC (“Lighthouse”) is a limited liability company operated

out of Wall’s residence in Freeport, Maine.  Prior to formation as an LLC in April 2015, Lighthouse

operated as an unincorporated entity.  Lighthouse describes itself as a Christian ministry that

promotes, organizes, and hosts Christian music concerts and festivals.

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LIGHTHOUSE’S FINANCIAL CONDITION

12. Wall formed Lighthouse in approximately August 2008 as a Christian concert

ministry to promote, organize, and host Christian music concerts and festivals in the northeast

United States and Canada.  Lighthouse’s website claims that in the last ten years, it has hosted more

than 800 concerts at over 50 churches and launched three music festivals.

13. Lighthouse’s upfront expenses to host a music concert or festival include deposits for

the artists and venues, radio promotions, and other production-related costs.

14. Lighthouse’s primary source of income is ticket sales, which includes advance sales

on Lighthouse’s website as well as direct sales at the music venue.  Lighthouse processes advance

ticket sales on its website by using a third-party payment processor to collect money and then

transfer it a bank account Wall uses for Lighthouse’s expenses.

15. Visitors to Lighthouse’s website, including people purchasing concert tickets, provide

Lighthouse with an email address.  Lighthouse collects these email addresses and regularly sends out

mass-marketing emails to promote concerts and festivals, as well as for other marketing purposes.

16. As early as 2014, Wall, both individually and on behalf of Lighthouse, began

borrowing money from companies that provide short-term cash advances to small businesses in need

of immediate cash flow.  These cash advances typically are subject to short repayment periods, high

rates of interest, and a daily remittance schedule (that is, mandatory direct debits from a bank

account each business day until the debt is paid).  Wall and Lighthouse borrowed a total of

approximately $700,000 from over one dozen cash advance companies, with most of the borrowing

occurring after mid-2016.  Repayments of these cash advances from 2014 through October 2018,

including interest, totaled approximately $1.1 million.

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17. Wall and Lighthouse were unable to repay all of the debt incurred from cash

advances.  As a result, between October 2017 and June 2018, at least five cash advance companies

obtained court-ordered judgments against Wall individually and Wall doing business as Lighthouse

for a total of more than $142,000.  The judgments authorized the cash advance companies to garnish

(i.e., seize money directly from) Wall and Lighthouse’s bank accounts, as well as the proceeds from

on-line ticket sales received by Lighthouse’s third-party payment processor.

WALL’S SCHEME TO DEFRAUD

18. From approximately January 2014 through October 2018 (the “Relevant Period”),

Wall and Lighthouse raised more than $3 million from approximately 145 investors by offering an

investment in promissory notes.  A promissory note is a financial instrument that contains a written

promise by one party (here, Lighthouse) to pay another party (the investor) a definite sum of money,

either on demand or at a specified future date.

19. Wall and Lighthouse were required to, but did not, register the promissory note

offering with the Commission.  Registering this offering would have required Lighthouse to provide

prospective investors certain documents disclosing its financial condition and the risks associated

with this investment.

20. Wall solicited investments primarily through mass marketing email blasts, using the

email addresses he compiled through Lighthouse’s website.  In addition, during the Relevant Period,

Lighthouse’s website contained a tab titled “Become an Investor” and prompted individuals to

submit their names and email addresses.  Wall also solicited investors directly at Lighthouse events.

As a group, the potential investors comprised persons self-identifying as Christian who were

attracted to Lighthouse as a Christian organization.

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21. A typical mass solicitation email stated:  “Become a financial partner with our

summer festivals.  Help us spread the message of Christ plus earn 20% on your investment.  To learn

more please e-mail Jeff Wall at [email protected].”

22. Potential investors who thereafter contacted Wall received more specific terms about

the investment.  Lighthouse’s promissory notes provided for a monthly repayment of the principal

plus a return of 10% to 25%, depending on the amount invested, over a 12-month period.

23. To induce potential investors to invest in Lighthouse, Wall, from at least 2015

onward, repeatedly made one or more of the following material misrepresentations in email

correspondence, text messages, and telephone calls, as well as in written promissory notes:

 First, Wall falsely represented that investor money would be used exclusively

for deposits and other costs associated with Lighthouse’s music concerts and festivals.   In

actuality, Wall never implemented any mechanism to track the use of investor funds to

ensure that they were used exclusively for the stated purpose.  From the beginning, Wall

primarily used one Lighthouse bank account to deposit all Lighthouse revenues and pay all

expenses.  As the profitability of Lighthouse’s concerts and festivals dwindled and its

borrowing from cash advance companies increased, investor funds were also used for the

payment of daily remittances and court-ordered judgments to the cash advance companies as

well as for payments to prior investors on older promissory notes.

 Second, Wall “guaranteed” the repayment of the promissory notes with a

fixed annual return ranging from 10% to 25%.   At the time he made this claim, Wall knew,

or was reckless in not knowing, that he could not guarantee payment and that he could only

repay investors if Lighthouse’s concerts and festivals were sufficiently profitable.

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 Third, Wall told prospective investors that the promissory notes were

“secured,” explicitly stating to some investors that repayment of principal plus interest was

not dependent on the success of any concert or music festival.  Neither Wall nor Lighthouse

ever pledged any collateral to secure the promissory notes.  At the time he made this claim,

Wall knew, or was reckless in not knowing, that he had no means to repay investors if

Lighthouse’s concerts and festivals were not sufficiently profitable.

 Fourth, Wall claimed that all prior investors had been paid back 100% of the

money invested.  By at least 2016, Wall knew this representation was patently false.  At that

time, Wall and Lighthouse had failed to fully repay some investors and had failed to pay a

single installment to others.

24. Wall represented that the promissory notes were safe and secure investments that

would earn high interest rates.  In making these representations, Wall intentionally hid from potential

investors crucial facts regarding Lighthouse’s deteriorating financial condition from declining ticket

sales, its growing debt from cash advances, and its inability to fully repay investors.  Concealing

these crucial facts rendered Wall’s statements materially false and misleading.

25. Examples of specific communications with investors whom Wall and Lighthouse

never fully repaid include the following:

Investors A and B

26. Investors A and B were business partners who had attended some of Lighthouse’s

concerts and had provided Lighthouse with their email address.  On November 4, 2017, they

received an email from Wall soliciting investments in Lighthouse.  On November 10, 2017,

Investors A and B replied to Wall’s email, asking for more information.  Thereafter, they

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participated in telephone calls with Wall during which he described the promissory notes and stated

that repayment would begin March 1, 2018.

27. On December 1, 2017, Wall emailed Investors A and B information about becoming

investors and a draft promissory note that Wall had signed.  The information sheet stated that

Lighthouse needed investors “to help us pay deposits for our summer festivals,” and contained the

following statements, all of which were false:

 The “loan is secured whether we make money or not on the festival.”

 “To date all our investors have been paid back 100% of the money invested…”

The accompanying promissory note also misrepresented that:

 “All funds are 100% guaranteed.”

28. Wall concealed from Investors A and B material information regarding Lighthouse’s

precarious financial condition from declining ticket sales, growing debt, inability to repay them if the

festival was not sufficiently profitable, and the growing number of investors with whom Lighthouse

was in arrears.

29. Investors A and B agreed to invest $25,000 in Lighthouse. They wired the money to

Wall and Lighthouse on or around December 5, 2017.

30. The final version of Investor A and B’s promissory note stated that they agreed to

make a $25,000 investment in exchange for a 20% return (for a total payment of $30,000) to be paid

back in 12 monthly installments of $2,500 beginning March 1, 2018.  The note stated that “[f]unds

will be used exclusively for Worship In The Adirondacks [a music festival].”

31. On March 1, 2018, Investors A and B did not receive any repayment.

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32. Beginning on March 8, 2018, Investors A and B emailed Wall, inquiring about the

status of their repayment.  Wall continued to hide Lighthouse’s myriad financial problems and

instead chose to lie continuously to Investors A and B, emailing them as follows:

 March 9, 2018: “Your March check will be going out on Monday to you.”  No
payment was sent.

 March 22, 2018:  “This week two checks have been mailed out to you and I will do
my very best to be punctual with our repayment.”  Wall did send two checks.  The
first check was dated March 20, 2018.  Wall, however, post-dated the second check to
prevent Investors A and B from attempting to cash it until April 10, 2018.

 May 25, 2018: “I will be sending May and June payments to you. You should have
soon.”  No payment was sent.

 July 5, 2018: “I plan on getting a check out this next week to you and will work very
hard at getting current.”  No payment was sent.

 September 16, 2018: “I will be restarting your payments in October and going to
work very hard to get current with you.”  No payments were sent.

33.   In total, Wall and Lighthouse made only two payments to Investors A and B totaling

$5000.

Investor C

34. Investor C is an individual who attended a Christian music concert presented by

Lighthouse in 2016.  Thereafter, Investor C began receiving emails from Lighthouse about

upcoming events and soliciting investors.  In at least one of these emails, Wall represented that

individuals could become “financial partners” with Lighthouse and earn up to 20% interest on their

investment.

35. In February 2018, motivated by the desire to support Lighthouse’s stated mission to

bring Christian music to the mid-Atlantic and New England, Investor C spoke by telephone to Wall

about becoming a “financial partner.”  Wall told this individual Lighthouse would pay 10% interest

on investments under $10,000, and 20% interest on investments of $10,000 or more.

10

36. After speaking with Investor C by phone, Wall emailed this individual.  Wall stated,

in part,

“Thank you for your interest in becoming a ministry partner as an investor. We
are humbled to hear from you. I would love to answer any questions you might
have on being an investor. We need investors to help us pay deposits for our
summer festivals. This is going to be our biggest year of ministry and need new
investors! The loan is secured whether we make money or not on the festival.
Investors are the backbone of our ministry. Without financial partners, we could
not move forward booking artists so please know how much we value our
investor team. To date all our investors have been paid back 100% of the money
invested, you may contact [NAME] at [PHONE NUMBER] who was a former
investor with any questions.”

37. Wall concealed from Investor C material information concerning Lighthouse’s

precarious financial condition from declining ticket sales, growing debt, inability to repay Investor C

if the festival was not sufficiently profitable, and the growing number of investors with whom

Lighthouse was in arrears.

38. Investor C decided to invest a total of $30,000.

39. According to the promissory note Wall and Investor C executed, Lighthouse was

obligated to pay Investor C 12 monthly installments of $3,000, with the first payment scheduled for

July 1, 2018.

40. Beginning on July 3, 2018, Investor C emailed Wall three times to inquire about the

status of the repayment before receiving a response.  Wall lied continuously to Investor C about

repayments, emailing as follows:

 July 9, 2018:  “I apologize for the delay in getting back to you. We had our festivals
these past two weekends and just slammed and overwhelmed. I will be getting your
first payment out to you in the next few days and do my best stay current and on
time.”  No payment was sent.

 July 19, 2018:  Having received no check, Investor C made another inquiry to Wall
about repayment, to which he responded, “Please confirm address and I will check in
the am.”  No payment was sent.

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 July 20, 2018:  “[Investor C] I don’t know what I did but I had completely wrong

address.  I will resend tomorrow and have updated spreadsheet.  Again I apologize
and not sure what I did to mess that up.  August payment will be on time, blessings.”
No payment was sent.

 August 4, 2018: “I do want to apologize for my silence over the last couple of

months. I know we are behind on our partnership.  I will be very honest here.  We
have had very bad ticket sales over the spring which is how we repay our partners and
then our festivals did not do as good as we were praying for. I feel terrible that we are
behind on our current on the partnership. I will do my very best to get current in the
next few weeks…”  No payment was sent.

 August 28, 2018: “[Investor C] I apologize for the delay in getting back to you.

Please know I 100% hear what you are saying and understand and ask for forgiveness
for the struggle.  As you know sales have just been awful but sales are slowly picking
up for us.  And hoping we can get current with you. I will work hard at getting a
check out to you in the next few days.  Please know how much we value you and I
feel awful we have struggled to get the partnership going and repayment started.”  No
payment was sent.

41. Wall ignored the remainder of Investor C’s follow-up emails seeking repayment.

42. Wall and Lighthouse never made a single payment to Investor C.

FIRST CLAIM FOR RELIEF

FRAUD IN THE OFFER OR SALE OF SECURITIES
(Violations of Section 17(a) of the Securities Act)

43. The Commission realleges and incorporates by reference the allegations in paragraphs

1 through 42 above.

44. During the Relevant Period, Lighthouse’s promissory notes were securities under

Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b(a)(1)].

45. By reason of the conduct described above, Wall and Lighthouse, in the offer or sale

of securities, by use of the means and instruments of transportation and communication in interstate

commerce or by use of the mails, directly or indirectly, acting with the requisite degree of

knowledge, state of mind, or negligence, have (a) employed devices, schemes, or artifices to

defraud; (b) obtained money or property by means of untrue statements of material fact or omissions

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to state material facts necessary in order to make the statements made, in light of the circumstances

under which they were made, not misleading; and (c) engaged in transactions, practices, or courses

of business which operate or would operate as a fraud or deceit upon the purchaser.

46. By engaging in the conduct described above, Wall and Lighthouse, directly or

indirectly, violated and, unless enjoined, will continue to violate Section 17(a) of the Securities Act

[15 U.S.C. § 77q(a)].

SECOND CLAIM FOR RELIEF
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES

(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder)

47. The Commission realleges and incorporates by reference the allegations in paragraphs

1 through 42 above.

48. During the Relevant Period, Lighthouse’s promissory notes were securities under

Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c(10)].

49. By reason of the conduct described above, Wall and Lighthouse, by engaging in the

conduct described above, directly or indirectly, by the use of means or instrumentalities of interstate

commerce or use of the mails, in connection with the purchase or sale of securities, with scienter, (a)

employed devices, schemes, or artifices to defraud; (b) made untrue statements of material fact or

omitted to state material facts necessary in order to make the statements made, in light of the

circumstances under which they were made, not misleading; and (c) engaged in acts, practices, or

courses of business that operated or would operate as a fraud and deceit upon other persons.

50. By engaging in the conduct described above, Wall and Lighthouse, violated, and

unless restrained and enjoined, will continue to violate Section 10(b) of the Exchange Act [15 U.S.C.

§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

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THIRD CLAIM FOR RELIEF
UNREGISTERED OFFERINGS OF SECURITIES

(Violations of Sections 5(a) and 5(c) of the Securities Act)

51. The Commission realleges and incorporates by reference the allegations in paragraphs

1 through 42 above.

52. By reason of the conduct described above, Wall and Lighthouse, directly or

indirectly: (a) made use of the means or instruments of transportation or communication in interstate

commerce or of the mails to sell, through the use or medium of a prospectus or otherwise, securities

as to which no registration statement has been in effect and for which no exemption from registration

has been available; and/or (b) made use of the means or instruments of transportation or

communication in interstate commerce or of the mails to offer to sell, through the use or medium of

a prospectus or otherwise, securities as to which no registration statement has been filed and for

which no exemption from registration has been available.

53. By engaging in the conduct described above, Wall and Lighthouse, violated, and

unless restrained and enjoined, will continue to violate, Sections 5(a) and (c) of the Securities Act

[15 U.S.C. §§ 77e(a), (c)].

PRAYER FOR RELIEF

WHEREFORE, the Commission respectfully requests that the Court:

A. Enter a permanent injunction restraining each of the Defendants, their officers,

agents, servants, employees and attorneys, and those persons in active concert or participation with

them who receive actual notice of the injunction from violating Sections 5(a), 5(c), and 17(a) of the

Securities Act [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)] and Section 10(b) of the Exchange Act [15

U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

14

B. Enter a permanent injunction restraining Wall and Lighthouse, directly or indirectly,

including, but not limited to, through any entity owned or controlled by Wall or Lighthouse, from

participating in the issuance, purchase, offer, or sale of any security, provided, however, that such an

injunction shall not prevent Wall from purchasing or selling securities for his own personal account.

C. Order the Defendants to disgorge on a joint and several basis, with prejudgment

interest, all ill-gotten gains obtained by reason of the unlawful conduct alleged in this Complaint.

D. Order the Defendants to pay civil monetary penalties pursuant to Section 20(d) of the

Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §

78u(d)(3)].

E. Retain jurisdiction over this action to implement and carry out the terms of all orders

and decrees that may be entered.

F. Grant such other and further relief, including equitable, as this Court may deem just

and appropriate.

JURY DEMAND

 The Commission demands a jury in this matter for all claims so triable.

DATED this 4th day of April, 2019

Respectfully submitted,

___________________________
David H. London (Mass. Bar. No. 638289)
Gretchen Lundgren (Mass. Bar No. 644742)
Counsel for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
Boston Regional Office
33 Arch Street, 24th Floor
Boston, MA 02110
(617) 573-8997 (London direct)
(617) 573-4590 (Facsimile)
[email protected]  (London email)
[email protected] (Lundgren email)

UNITED STATES DISTRICT COURT 
DISTRICT OF MAINE 

         
        ) 
SECURITIES AND EXCHANGE COMMISSION,  ) 
        ) 
    Plaintiff,   ) Civil Action No. 
 v.       )       
        ) 
JEFFREY E. WALL      )  JURY TRIAL DEMANDED 
and THE LIGHTHOUSE EVENTS, LLC   ) 
        ) 
    Defendants,   ) 

    )  
        ) 
 

COMPLAINT 
 

Plaintiff Securities and Exchange Commission (the “Commission”) alleges the following 

against Defendants Jeffrey E. Wall (“Wall”) and The Lighthouse Events, LLC (“Lighthouse”): 

SUMMARY 
 

1. This case involves a securities offering promoted through false and misleading 

representations by Wall and his entity Lighthouse, which describes itself as a ministry located in 

Freeport, Maine that hosts Christian music concerts and festivals.  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.  In this case, the 

Defendants defrauded investors who shared Wall’s religious views. 

2.  Between early 2014 and October 2018, Wall and Lighthouse raised more than $3 

million from approximately 145 investors through a promissory note program. Wall intentionally 

made false representations to entice investors and hid the risks associated with the investment.  The 

promissory notes in this case are securities that are subject to the federal securities laws enforced by 

the Commission.   

Case 2:19-cv-00139-LEW   Document 1   Filed 04/04/19   Page 1 of 14    PageID #: 1



2 
 

3. Wall falsely told potential investors that the funds entrusted to him would be used 

solely to promote and host Christian music concerts and festivals.  He claimed that repayment was 

“secured” and “guaranteed” within 12 months of the initial investment, with a fixed return ranging 

from 10% to 25%.  Instead, Wall used investor funds for other expenses, including payment of Wall 

and Lighthouse’s high-interest debt from cash advances and payments to earlier investors using later 

investors’ money.  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. 

4. Wall and Lighthouse quickly fell into arrears with investors; by the end of the four-

year scheme, Defendants had only repaid approximately half of the $3 million in principal solicited 

from investors.  As a result, Wall and Lighthouse have failed to repay approximately $1.6 million of 

the monies fraudulently collected from investors. 

NATURE OF THE PROCEEDING AND RELIEF SOUGHT 

5. The Commission brings this action pursuant to the authority conferred upon it by 

Section 20(b) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77t(b)] and Sections 

21(d) and 21(e) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§78u(d) and 

78u(e)].  The Commission seeks permanent injunctions against Wall and Lighthouse, enjoining them 

from committing further violations of the relevant provisions of the federal securities laws; entry of a 

permanent injunction prohibiting specific conduct by Wall and Lighthouse related to the violations 

alleged; disgorgement of all ill-gotten gains from the unlawful conduct set forth in this Complaint, 

together with prejudgment interest; civil penalties pursuant to Section 20(d) of the Securities Act [15 

Case 2:19-cv-00139-LEW   Document 1   Filed 04/04/19   Page 2 of 14    PageID #: 2



3 
 

U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]; and such other 

relief as the Court may deem appropriate. 

JURISDICTION AND VENUE 

6. The Court has jurisdiction over this action pursuant to Sections 20(b) and 22(a) of the 

Securities Act [15 U.S.C. §§ 77t(b) and 77v(a)], and Sections 21(d), 21(e), and 27 of the Exchange 

Act [15 U.S.C. §§78u(d), 78u(e), and 78aa]. 

7. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. 

§ 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §78aa], because Wall and Lighthouse 

reside and transact business in the District of Maine, and many of the acts, practices, transactions, 

and courses of business alleged in this Complaint occurred within the district. 

8. Defendants have, directly or indirectly, made use of the means and instrumentalities 

of interstate commerce, of the mails, or of the facilities of a national securities exchange in 

connection with the acts, practices, and courses of business alleged in this complaint. 

9. Defendants’ conduct took place in connection with the offer and/or sale of securities. 

DEFENDANTS 
 

10. Jeffrey E. Wall, age 55, is a resident of Freeport, Maine.  Wall is the founder and 

sole member of The Lighthouse Events, LLC. 

11. The Lighthouse Events, LLC (“Lighthouse”) is a limited liability company operated 

out of Wall’s residence in Freeport, Maine.  Prior to formation as an LLC in April 2015, Lighthouse 

operated as an unincorporated entity.  Lighthouse describes itself as a Christian ministry that 

promotes, organizes, and hosts Christian music concerts and festivals.   

 

 

Case 2:19-cv-00139-LEW   Document 1   Filed 04/04/19   Page 3 of 14    PageID #: 3



4 
 

LIGHTHOUSE’S FINANCIAL CONDITION 

12. Wall formed Lighthouse in approximately August 2008 as a Christian concert 

ministry to promote, organize, and host Christian music concerts and festivals in the northeast 

United States and Canada.  Lighthouse’s website claims that in the last ten years, it has hosted more 

than 800 concerts at over 50 churches and launched three music festivals. 

13. Lighthouse’s upfront expenses to host a music concert or festival include deposits for 

the artists and venues, radio promotions, and other production-related costs. 

14. Lighthouse’s primary source of income is ticket sales, which includes advance sales 

on Lighthouse’s website as well as direct sales at the music venue.  Lighthouse processes advance 

ticket sales on its website by using a third-party payment processor to collect money and then 

transfer it a bank account Wall uses for Lighthouse’s expenses. 

15. Visitors to Lighthouse’s website, including people purchasing concert tickets, provide 

Lighthouse with an email address.  Lighthouse collects these email addresses and regularly sends out 

mass-marketing emails to promote concerts and festivals, as well as for other marketing purposes. 

16. As early as 2014, Wall, both individually and on behalf of Lighthouse, began 

borrowing money from companies that provide short-term cash advances to small businesses in need 

of immediate cash flow.  These cash advances typically are subject to short repayment periods, high 

rates of interest, and a daily remittance schedule (that is, mandatory direct debits from a bank 

account each business day until the debt is paid).  Wall and Lighthouse borrowed a total of 

approximately $700,000 from over one dozen cash advance companies, with most of the borrowing 

occurring after mid-2016.  Repayments of these cash advances from 2014 through October 2018, 

including interest, totaled approximately $1.1 million. 

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17. Wall and Lighthouse were unable to repay all of the debt incurred from cash 

advances.  As a result, between October 2017 and June 2018, at least five cash advance companies 

obtained court-ordered judgments against Wall individually and Wall doing business as Lighthouse 

for a total of more than $142,000.  The judgments authorized the cash advance companies to garnish 

(i.e., seize money directly from) Wall and Lighthouse’s bank accounts, as well as the proceeds from 

on-line ticket sales received by Lighthouse’s third-party payment processor.   

WALL’S SCHEME TO DEFRAUD 

18. From approximately January 2014 through October 2018 (the “Relevant Period”), 

Wall and Lighthouse raised more than $3 million from approximately 145 investors by offering an 

investment in promissory notes.  A promissory note is a financial instrument that contains a written 

promise by one party (here, Lighthouse) to pay another party (the investor) a definite sum of money, 

either on demand or at a specified future date.    

19. Wall and Lighthouse were required to, but did not, register the promissory note 

offering with the Commission.  Registering this offering would have required Lighthouse to provide 

prospective investors certain documents disclosing its financial condition and the risks associated 

with this investment.    

20. Wall solicited investments primarily through mass marketing email blasts, using the 

email addresses he compiled through Lighthouse’s website.  In addition, during the Relevant Period, 

Lighthouse’s website contained a tab titled “Become an Investor” and prompted individuals to 

submit their names and email addresses.  Wall also solicited investors directly at Lighthouse events.  

As a group, the potential investors comprised persons self-identifying as Christian who were 

attracted to Lighthouse as a Christian organization. 

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21. A typical mass solicitation email stated:  “Become a financial partner with our 

summer festivals.  Help us spread the message of Christ plus earn 20% on your investment.  To learn 

more please e-mail Jeff Wall at [email protected].”    

22. Potential investors who thereafter contacted Wall received more specific terms about 

the investment.  Lighthouse’s promissory notes provided for a monthly repayment of the principal 

plus a return of 10% to 25%, depending on the amount invested, over a 12-month period.    

23. To induce potential investors to invest in Lighthouse, Wall, from at least 2015 

onward, repeatedly made one or more of the following material misrepresentations in email 

correspondence, text messages, and telephone calls, as well as in written promissory notes:   

 First, Wall falsely represented that investor money would be used exclusively 

for deposits and other costs associated with Lighthouse’s music concerts and festivals.   In 

actuality, Wall never implemented any mechanism to track the use of investor funds to 

ensure that they were used exclusively for the stated purpose.  From the beginning, Wall 

primarily used one Lighthouse bank account to deposit all Lighthouse revenues and pay all 

expenses.  As the profitability of Lighthouse’s concerts and festivals dwindled and its 

borrowing from cash advance companies increased, investor funds were also used for the 

payment of daily remittances and court-ordered judgments to the cash advance companies as 

well as for payments to prior investors on older promissory notes.   

 Second, Wall “guaranteed” the repayment of the promissory notes with a 

fixed annual return ranging from 10% to 25%.   At the time he made this claim, Wall knew, 

or was reckless in not knowing, that he could not guarantee payment and that he could only 

repay investors if Lighthouse’s concerts and festivals were sufficiently profitable.    

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 Third, Wall told prospective investors that the promissory notes were 

“secured,” explicitly stating to some investors that repayment of principal plus interest was 

not dependent on the success of any concert or music festival.  Neither Wall nor Lighthouse 

ever pledged any collateral to secure the promissory notes.  At the time he made this claim, 

Wall knew, or was reckless in not knowing, that he had no means to repay investors if 

Lighthouse’s concerts and festivals were not sufficiently profitable. 

 Fourth, Wall claimed that all prior investors had been paid back 100% of the 

money invested.  By at least 2016, Wall knew this representation was patently false.  At that 

time, Wall and Lighthouse had failed to fully repay some investors and had failed to pay a 

single installment to others.   

24. Wall represented that the promissory notes were safe and secure investments that 

would earn high interest rates.  In making these representations, Wall intentionally hid from potential 

investors crucial facts regarding Lighthouse’s deteriorating financial condition from declining ticket 

sales, its growing debt from cash advances, and its inability to fully repay investors.  Concealing 

these crucial facts rendered Wall’s statements materially false and misleading. 

25. Examples of specific communications with investors whom Wall and Lighthouse 

never fully repaid include the following: 

Investors A and B 

26. Investors A and B were business partners who had attended some of Lighthouse’s 

concerts and had provided Lighthouse with their email address.  On November 4, 2017, they 

received an email from Wall soliciting investments in Lighthouse.  On November 10, 2017, 

Investors A and B replied to Wall’s email, asking for more information.  Thereafter, they 

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participated in telephone calls with Wall during which he described the promissory notes and stated 

that repayment would begin March 1, 2018. 

27. On December 1, 2017, Wall emailed Investors A and B information about becoming  

investors and a draft promissory note that Wall had signed.  The information sheet stated that 

Lighthouse needed investors “to help us pay deposits for our summer festivals,” and contained the 

following statements, all of which were false: 

 The “loan is secured whether we make money or not on the festival.” 
 

 “To date all our investors have been paid back 100% of the money invested…” 
   
The accompanying promissory note also misrepresented that: 
 

 “All funds are 100% guaranteed.” 

28. Wall concealed from Investors A and B material information regarding Lighthouse’s 

precarious financial condition from declining ticket sales, growing debt, inability to repay them if the 

festival was not sufficiently profitable, and the growing number of investors with whom Lighthouse 

was in arrears.   

29. Investors A and B agreed to invest $25,000 in Lighthouse. They wired the money to 

Wall and Lighthouse on or around December 5, 2017. 

30. The final version of Investor A and B’s promissory note stated that they agreed to 

make a $25,000 investment in exchange for a 20% return (for a total payment of $30,000) to be paid 

back in 12 monthly installments of $2,500 beginning March 1, 2018.  The note stated that “[f]unds 

will be used exclusively for Worship In The Adirondacks [a music festival].” 

31. On March 1, 2018, Investors A and B did not receive any repayment.  

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32. Beginning on March 8, 2018, Investors A and B emailed Wall, inquiring about the 

status of their repayment.  Wall continued to hide Lighthouse’s myriad financial problems and 

instead chose to lie continuously to Investors A and B, emailing them as follows: 

 March 9, 2018: “Your March check will be going out on Monday to you.”  No 
payment was sent. 
 

 March 22, 2018:  “This week two checks have been mailed out to you and I will do 
my very best to be punctual with our repayment.”  Wall did send two checks.  The 
first check was dated March 20, 2018.  Wall, however, post-dated the second check to 
prevent Investors A and B from attempting to cash it until April 10, 2018. 
 

 May 25, 2018: “I will be sending May and June payments to you. You should have 
soon.”  No payment was sent. 
 

 July 5, 2018: “I plan on getting a check out this next week to you and will work very 
hard at getting current.”  No payment was sent.  
 

 September 16, 2018: “I will be restarting your payments in October and going to 
work very hard to get current with you.”  No payments were sent. 
 

33.   In total, Wall and Lighthouse made only two payments to Investors A and B totaling 

$5000. 

Investor C 

34. Investor C is an individual who attended a Christian music concert presented by 

Lighthouse in 2016.  Thereafter, Investor C began receiving emails from Lighthouse about 

upcoming events and soliciting investors.  In at least one of these emails, Wall represented that 

individuals could become “financial partners” with Lighthouse and earn up to 20% interest on their 

investment.   

35. In February 2018, motivated by the desire to support Lighthouse’s stated mission to 

bring Christian music to the mid-Atlantic and New England, Investor C spoke by telephone to Wall 

about becoming a “financial partner.”  Wall told this individual Lighthouse would pay 10% interest 

on investments under $10,000, and 20% interest on investments of $10,000 or more.     

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36. After speaking with Investor C by phone, Wall emailed this individual.  Wall stated, 

in part,  

“Thank you for your interest in becoming a ministry partner as an investor. We 
are humbled to hear from you. I would love to answer any questions you might 
have on being an investor. We need investors to help us pay deposits for our 
summer festivals. This is going to be our biggest year of ministry and need new 
investors! The loan is secured whether we make money or not on the festival. 
Investors are the backbone of our ministry. Without financial partners, we could 
not move forward booking artists so please know how much we value our 
investor team. To date all our investors have been paid back 100% of the money 
invested, you may contact [NAME] at [PHONE NUMBER] who was a former 
investor with any questions.” 
 

37. Wall concealed from Investor C material information concerning Lighthouse’s 

precarious financial condition from declining ticket sales, growing debt, inability to repay Investor C 

if the festival was not sufficiently profitable, and the growing number of investors with whom 

Lighthouse was in arrears. 

38. Investor C decided to invest a total of $30,000. 

39. According to the promissory note Wall and Investor C executed, Lighthouse was 

obligated to pay Investor C 12 monthly installments of $3,000, with the first payment scheduled for 

July 1, 2018.      

40. Beginning on July 3, 2018, Investor C emailed Wall three times to inquire about the 

status of the repayment before receiving a response.  Wall lied continuously to Investor C about 

repayments, emailing as follows: 

 July 9, 2018:  “I apologize for the delay in getting back to you. We had our festivals 
these past two weekends and just slammed and overwhelmed. I will be getting your 
first payment out to you in the next few days and do my best stay current and on 
time.”  No payment was sent. 
 

 July 19, 2018:  Having received no check, Investor C made another inquiry to Wall 
about repayment, to which he responded, “Please confirm address and I will check in 
the am.”  No payment was sent. 

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 July 20, 2018:  “[Investor C] I don’t know what I did but I had completely wrong 

address.  I will resend tomorrow and have updated spreadsheet.  Again I apologize 
and not sure what I did to mess that up.  August payment will be on time, blessings.”  
No payment was sent. 

 
 August 4, 2018: “I do want to apologize for my silence over the last couple of 

months. I know we are behind on our partnership.  I will be very honest here.  We 
have had very bad ticket sales over the spring which is how we repay our partners and 
then our festivals did not do as good as we were praying for. I feel terrible that we are 
behind on our current on the partnership. I will do my very best to get current in the 
next few weeks…”  No payment was sent. 

 
 August 28, 2018: “[Investor C] I apologize for the delay in getting back to you. 

Please know I 100% hear what you are saying and understand and ask for forgiveness 
for the struggle.  As you know sales have just been awful but sales are slowly picking 
up for us.  And hoping we can get current with you. I will work hard at getting a 
check out to you in the next few days.  Please know how much we value you and I 
feel awful we have struggled to get the partnership going and repayment started.”  No 
payment was sent. 

 
41. Wall ignored the remainder of Investor C’s follow-up emails seeking repayment.   

42. Wall and Lighthouse never made a single payment to Investor C.   

 
FIRST CLAIM FOR RELIEF 

FRAUD IN THE OFFER OR SALE OF SECURITIES 
(Violations of Section 17(a) of the Securities Act) 

 
43. The Commission realleges and incorporates by reference the allegations in paragraphs 

1 through 42 above. 

44. During the Relevant Period, Lighthouse’s promissory notes were securities under 

Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b(a)(1)]. 

45. By reason of the conduct described above, Wall and Lighthouse, in the offer or sale 

of securities, by use of the means and instruments of transportation and communication in interstate 

commerce or by use of the mails, directly or indirectly, acting with the requisite degree of 

knowledge, state of mind, or negligence, have (a) employed devices, schemes, or artifices to 

defraud; (b) obtained money or property by means of untrue statements of material fact or omissions 

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to state material facts necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading; and (c) engaged in transactions, practices, or courses 

of business which operate or would operate as a fraud or deceit upon the purchaser. 

46. By engaging in the conduct described above, Wall and Lighthouse, directly or 

indirectly, violated and, unless enjoined, will continue to violate Section 17(a) of the Securities Act 

[15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES 

(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) 

47. The Commission realleges and incorporates by reference the allegations in paragraphs 

1 through 42 above. 

48. During the Relevant Period, Lighthouse’s promissory notes were securities under 

Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c(10)]. 

49. By reason of the conduct described above, Wall and Lighthouse, by engaging in the 

conduct described above, directly or indirectly, by the use of means or instrumentalities of interstate 

commerce or use of the mails, in connection with the purchase or sale of securities, with scienter, (a) 

employed devices, schemes, or artifices to defraud; (b) made untrue statements of material fact or 

omitted to state material facts necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and (c) engaged in acts, practices, or 

courses of business that operated or would operate as a fraud and deceit upon other persons. 

50. By engaging in the conduct described above, Wall and Lighthouse, violated, and 

unless restrained and enjoined, will continue to violate Section 10(b) of the Exchange Act [15 U.S.C. 

§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

 

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THIRD CLAIM FOR RELIEF 
UNREGISTERED OFFERINGS OF SECURITIES 

(Violations of Sections 5(a) and 5(c) of the Securities Act) 

51. The Commission realleges and incorporates by reference the allegations in paragraphs 

1 through 42 above. 

52. By reason of the conduct described above, Wall and Lighthouse, directly or 

indirectly: (a) made use of the means or instruments of transportation or communication in interstate 

commerce or of the mails to sell, through the use or medium of a prospectus or otherwise, securities 

as to which no registration statement has been in effect and for which no exemption from registration 

has been available; and/or (b) made use of the means or instruments of transportation or 

communication in interstate commerce or of the mails to offer to sell, through the use or medium of 

a prospectus or otherwise, securities as to which no registration statement has been filed and for 

which no exemption from registration has been available. 

53. By engaging in the conduct described above, Wall and Lighthouse, violated, and 

unless restrained and enjoined, will continue to violate, Sections 5(a) and (c) of the Securities Act 

[15 U.S.C. §§ 77e(a), (c)]. 

 
PRAYER FOR RELIEF 

 
WHEREFORE, the Commission respectfully requests that the Court: 

 
A. Enter a permanent injunction restraining each of the Defendants, their officers, 

agents, servants, employees and attorneys, and those persons in active concert or participation with 

them who receive actual notice of the injunction from violating Sections 5(a), 5(c), and 17(a) of the 

Securities Act [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)] and Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

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B. Enter a permanent injunction restraining Wall and Lighthouse, directly or indirectly, 

including, but not limited to, through any entity owned or controlled by Wall or Lighthouse, from 

participating in the issuance, purchase, offer, or sale of any security, provided, however, that such an 

injunction shall not prevent Wall from purchasing or selling securities for his own personal account. 

C. Order the Defendants to disgorge on a joint and several basis, with prejudgment 

interest, all ill-gotten gains obtained by reason of the unlawful conduct alleged in this Complaint.  

D. Order the Defendants to pay civil monetary penalties pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)]. 

E. Retain jurisdiction over this action to implement and carry out the terms of all orders 

and decrees that may be entered. 

F. Grant such other and further relief, including equitable, as this Court may deem just 

and appropriate. 

JURY DEMAND 

 The Commission demands a jury in this matter for all claims so triable. 

DATED this 4th day of April, 2019 

Respectfully submitted, 

 
___________________________ 
David H. London (Mass. Bar. No. 638289) 
Gretchen Lundgren (Mass. Bar No. 644742) 
Counsel for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
Boston Regional Office 
33 Arch Street, 24th Floor 
Boston, MA 02110 
(617) 573-8997 (London direct) 
(617) 573-4590 (Facsimile) 
[email protected]  (London email) 
[email protected] (Lundgren email)  

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