The Securities and Exchange Commission announced that New York entrepreneur William Z. McFarland, his two companies, a former senior executive and a former contractor agreed to settle charges from an extensive, multi-year offering fraud that raised $27.4 million from over 100 investors.
The SEC’s complaint alleged that McFarland fraudulently induced investors to capitalize his companies. The corporate entities include Fyre Media, Inc., Fyre Festival LLC, Magnises, Inc. and McFarland’s failed venture to host a “once-in-a-lifetime” music festival in the Bahamas.
The order says that with extensive backing from Grant H. Margolin, his chief marketing officer, and Daniel Simon, an independent contractor to his companies, McFarland induced investors to entrust him with tens of millions of dollars. He also fraudulently inflated lynchpin operational and financial metrics.
The order says that McFarland provided investors with a falsified brokerage account statement. In the document, McFarland purports to possess personal stock holdings of more than $2.5 million. In reality, however, the account held shares totaling less than $1,500.
