Application of Securities Law to Church Bond and Financing Programs
This is a new area of church law, which may continue to be more prevalent.
Under these rules, securities laws are enforced against churches or ministers, in the same way that they are enforced against corporations for fraudulent stock issues. In some cases, ministers have been held to be criminally and civilly liable.
In general, there should not be a material omission of financial information about the church or its financing or its building program. Material misrepresentations of the financial strength of condition of a church can lead to problems. There should not be false predictions of success or pay-back probabilities on these programs. Also, unfounded guarantees can result in problems.