SEC Charges Fyre Festival Organizers With Fraud
* Made false statements concerning key Fyre Media and Fyre Festival financial metrics and assets;
* Falsified financial data;
* Made false claims of affiliations with talent;
* Created a fraudulent brokerage statement in order to suggest to investors and banks that McFarland personally possessed collateral sufficient to securitize investments;
* Created a fraudulent brokerage statement in order to suggest to investors and banks that McFarland personally possessed collateral sufficient to securitize investments;
* Made false statements and created a fake document concerning purported bank loans and a purported significant pending investment in Fyre Media;
* Claimed, falsely, that they would obtain event cancellation insurance for Fyre Festival; and
* Claimed, falsely, that they would obtain event cancellation insurance for Fyre Festival; and
* Engaged in a scheme to create the illusion that Magnises was being acquired by a third party that did not exist.
The SEC said that McFarland used investor funds to bankroll a lavish lifestyle, including living in a Manhattan penthouse apartment, partying with celebrities and traveling by private plane and chauffeured luxury cars.
“McFarland gained the trust of investors by falsely portraying himself as a skilled entrepreneur running a series of successful media companies," said Melissa Hodgman, associate director of the SEC’s Enforcement Division." But this false picture of business success was built on fake brokerage statements and stolen investor funds.”