In the video, Long said that since City Capital Corp. came to visit his church, some members have faced bankruptcy, foreclosure, or significant losses in their retirement accounts. Bishop Long made a public appeal to the company's former CEO, Ephren Taylor, and the rest of the company to do the right thing and return the money to those who've been hurt.
In a press release issued on Monday, Bishop Long informed the media that several members of his church alerted him to concerns they had about City Capital. Roughly 20 members of the church invested with the company, according to published reports.
According to the video, Taylor resigned from City Capital on October 22, in part because of filings with the Securities and Exchange Commission. Jeff M. Smuda has been chosen to replace Taylor. Taylor had visited Long's church, the New Birth Missionary Baptist Church as part of the company's National Financial Empowerment Tour.
I was saddened to hear about these allegations as they pertain to Efren Taylor's company. I've received disturbing messages in my email containing allegations of fraudulent behavior by City Capital Corp. While I am not in a position to determine whether or not any of the allegations are true, I can offer a few perspectives as a Finance Professor.
First, the concept of the "Financial Empowerment Tour" as a tool to lure African Americans into questionable investments is a common weapon designed to exploit our community's lack of financial literacy. Many of us are easily fascinated by fancy financial terms being spewed by experts in fancy suits. This leaves us vulnerable to a multitude of devious financial schemes. So, whether City Capital is guilty of swindling anyone or not, there are companies who work regularly to take advantage of the trust generated by forums being held in a house of worship.
This case also shows that churches may want to do a better job of screening those who are allowed to provide seminars in front of their congregations. In far too many cases, investment advisers who are also members of the church are allowed to present their information to the congregation without being properly vetted by the church. Again, this doesn't imply that Ephren Taylor was fraudulent, but there are plenty of investment advisers in the church who are seeking to run a game on the other members of the congregation.
Finally, we must also acknowledge that it may be the case that City Capital did nothing wrong. The stock market has many ups and downs, and being invested is no guarantee that you're going to end up better off financially. Having members who lost money on their investments does not readily imply that either Ephren Taylor or City Capital were fraudulent. But Taylor's pending investigation by the SEC seems to argue that there are broader concerns that may go beyond the standard ups and downs of the stock market. I encourage members of New Birth to wait for the outcome of this investigation before jumping to any conclusions.
Dr. Boyce Watkins is the founder of the Your Black World Coalition and a Scholarship in Action Resident of the Institute for Black Public Policy. To have Dr. Boyce commentary delivered to your email, please click here.