Thats my personal mission. The breadth of risk is extremely wide. The SECs complaint alleges that McDonald raised over $3.6 million from investors between May 2019 and October 2021, which he told investors would be used to trade securities through an investment vehicle called the Index Strategy Advisors Fund. The SEC alleges that McDonald, a former guest commentator on CNBC, raised more than $5.1 million from 23 investors and clients, and misappropriated more than $2.9 million of those funds for personal expenses and Ponzi-like payments to earlier investors. On September 21, 2022, the SEC announced charges against James Arthur McDonald, Jr. and his SEC-registered investment adviser firm, Hercules Investments, LLC in connection with two fraudulent securities offerings. Quant Research-Driven Investment Strategies For Investors Seeking Active Portfolio Management. In early 2021, McDonald "solicited millions of dollars worth of funds from investors in the form of a purported capital raise for Hercules but misrepresented how the funds would be used and failed to disclose the massive losses Hercules previously sustained," the statement said. Below are excerpts from our Jan. 28 discussion, edited for length and clarity. Small businesses are suffering tremendously, and theyre always going to be the engine of growth for the economy. When we perform well for the client, we perform well for ourselves. The complaint also charges McDonald with violating Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder, which prohibit certain transactions by investment advisers. On 11/16/2021 HERCULES INVESTMENTS, LLC filed a Contract - Business lawsuit against DANNY MICHAEL CORRAL. Or, you know, anywhere, really. In late 2020, McDonald lost between $30 million and $40 million of Hercules client money after adopting "a risky short position" based on his wrong prediction that the stock market would drop because of the COVID-19 pandemic and the results of the U.S. presidential election, the U.S. attorney's office said. This site contains attorney advertising. This case was filed in Los Angeles County Superior Courts, Norwalk Courthouse located in Los Angeles, California. The United States Securities and Exchange Commission subpoenaed McDonald to testify before it in November 2021, but without advance notice he failed to appear as required. // Disclaimer. And so, if the market falls say 10%, our allocations will potentially offset the losses in the long only portfolio. And so, my passion and focus in trading is very personal and Im committed to generating profits for my clients with a motivation that goes far beyond investing. This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Below are the states with which the firm you selected makes its notice filings. Now he's wanted on fraud charges. To be clear, you expect a risk event this year will take the Dow down to 15,000 but by year end it will finish higher than today? We are able to provide uncorrelated growth, meaning our strategies do not depend on equity markets continuing to rise in order to accomplish gains. "For nearly 100 years investment firms have sought to address the average investor's goals with simplistic and inefficient mutual funds, or expensive and highly inconsistent stock picking. McDonald was CEO of Hercules Investments LLC of Los Angeles and Index Strategy Advisors Inc. of Redondo Beach, and frequently appeared as an analyst on the CNBC financial TV news network, authorities said. The SEC alleges that McDonald commingled the investor funds with Hercules assets and his personal assets, and used $440,000 of those funds for personal expenses, including to pay his personal credit card bills. Lets call it artificial income and artificial credit for small businesses that are keeping the economy alive. In a parallel action, the United States Attorneys Office for the Central District of California announced criminal charges against McDonald. LOS ANGELES, Oct. 10, 2019 /PRNewswire/ -- Award-winning derivatives investment management executive James A. McDonald, Jr. today announced that he has launched Hercules Investments LLC, a Los Angeles-based Registered Investment Advisor.Hercules applies quantitative research to design and actively manage portfolios for investors seeking maximum growth during up or down-market cycles. Greg Bartalos (@gregorianchance) is editor of New York City-based RIA Intel. According to the complaint, McDonald falsely represented that investor funds would be used to expand Hercules's business, lied about the firm's financial condition, and failed to disclose that he had promised Hercules clients that the firm would repay earlier losses. We had to save the economy from going off the cliff with us not being able to operate as normal," McDonald said. The affidavit of service states that the summons and complaint were served on James McDonald by service to Beatriz Lima, "as person in charge of the place of business / authorized to accept service on behalf of Hercules Investments, LLC, a California limited liability company at 1718 18 Harriman Lane, #A, Redondo Beach, CA 90278." I use this blog to bring attention to regulatory filings involving financial advisors, current events in securities and cases in the financial services industry, and to help investors understand their rights and options for financial recovery. When typing in this field, a list of search results will appear and be automatically updated as you type. Hercules Investments CEO/CIO James McDonald. Now, there are a handful of companies that have flourished in the Covid era, but its a handful of companies. 2023 CNBC LLC. Unfortunately, according to the Justice Department and SEC, he didnt tell those new investors about all the money he lost on the election, nor precisely what he was going to do with it, as dropping $174K at a Porsche dealership and paying $110K to his landlord are not the same thing as launching a mutual fund. I think the phenomena is an anomaly like virtually every pocket of life were in right now. Accounting and Auditing Enforcement Releases. A man who ran two California-based investment companies and frequently appeared as a TV financial news analyst was charged Wednesday with securities fraud for allegedly bilking clients out of millions of dollars, federal prosecutors said. Any reference to past cases or successes made herein should not be construed as a guarantee of any future outcome. For more information, please see www.hercules-investments.com, Media Contact: Matt Yemma Peaks Strategies 909-633-9396 [emailprotected], Cision Distribution 888-776-0942 There are hundreds of companies in the small cap space that dont have the cash to pay their debt. Mr. McDonald previously was CEO/CIO of Index Strategy Advisors Inc. (ISA) from 2010-2019. *Our firm, in some cases, advance costs and expenses of the case, and in that event, are recovered from the gross recovery of any settlement or verdict. All material subject to strictly enforced copyright laws. Recent filings for HERCULES INVESTMENTS LLC 28 Jun 2019 SI-COMPLETE view 8 Jun 2019 REGISTRATION view Market data provided by Factset. Its an all-weather strategy. (Jun 1986 - Sep 2016) 101 Royal Park Dr. Oakland Park, FL 33309. Our employees and their family members enjoyed a wonderful time together this morning at PureTrack in Anaheim, CA! This seriously cut in to his fee income, and CNBC appearance feesoh, yes, he was still bloviating on television about on how people should invest for more than a year-and-a-half after the most spectacular wrong call of his careerapparently dont cover the Porsches or the rent, so he decided to raise some more. Instead, McDonald allegedly misappropriated more than $1 million of the funds for personal expenses, including luxury vehicles and paying rent on his home, and misappropriated more than $2 million of the funds for Ponzi-like payments, payments to his Hercules investment adviser clients and expenses associated with operating Hercules. LOS ANGELES, Oct. 10, 2019 /PRNewswire/ -- Award-winning derivatives investment management executive James A. McDonald, Jr. today announced that he has launched Hercules Investments LLC,. In late 2020, McDonald lost between $30 million and $40 million of Hercules client money after adopting "a risky short position" based on his wrong prediction that the stock market would drop. McDonald, who lived in the Los Angeles suburb of Arcadia, is believed to be in hiding, the statement said. How does it factor into your life? The SEC's complaint alleges that McDonald raised over $3.6 million from investors between May 2019 and October 2021 for the stated purpose of trading securities through an investment vehicle called the Index Strategy Advisors Fund, and that McDonald used less than half those funds for trading and did not engage in any trading with the funds for long stretches of time. Our ability to monetize volatility is exceptional as evidenced by our winning WealthManagement.coms 2020 Wealthies Award as top Alternative Asset Manager. Prosecutors allege that McDonald concealed massive financial losses from some clients and used some investment money for personal expenses, spending some of it at a Porsche dealership and on a website that sells designer menswear. We can deliver these same strategies to investor portfolios with less than $1 million," said Mr. McDonald, Chief Executive Officer of Hercules and previous winner of the Top 10 Advisors Rising Stars award from ETF Report magazine. More on that later. los angeles, oct. 10, 2019 /prnewswire/ -- award-winning derivatives investment management executive james a. mcdonald, jr. today announced that he has launched hercules investments llc, a los angeles-based registered investment advisor.hercules applies quantitative research to design and actively manage portfolios for investors seeking maximum How Hercules Investments capitalizes on systematic volatility; The companys risk-hedging technique designed to help financial advisors and clients; How James McDonalds firm helps financial advisors grow their prospects; Hercules Investments ideal client as those who got aggressive growth goals; Allowed HTML tags: . Additionally, McDonald raised $1.5 million through equity investment sales in Hercules business while lying, failing to disclose important facts, and more. Quotes displayed in real-time or delayed by at least 15 minutes. Actually, he didnt just assume it: He bet his clients money rather heavily on it, and lost them upwards of $40 million doing so. And so, this is artificial. Mutual Fund and ETF data provided by Refinitiv Lipper. GESCO is a security company operating in various fields and basing on the principle of physical protection. And while recognizing that each investors needs are distinct, on balance what percentage of a portfolio should this comprise? GESCO combines international experience and quality standards with modern technologies and opportunities and local professional service. Quotes displayed in real-time or delayed by at least 15 minutes. This inflation will cause interest rates to rise in the medium term or long term and the necessary pullback in the markets will be a result of investors taking risk off the table. Founded on May 26, 2005, GESCO provides private and corporate security services in various regions of the country including Baku, in accordance with the requirements of ISO 9001, ISO 14001, ISO 45001. The bull case would imply that were 50% stronger in terms of our earnings premium over our equity premium based on what we pay for earnings. The attorneys at ChapmanAlbin are licensed to practice law in Ohio and Michigan. Despite the challenges of Covid, equity markets have pushed to all-time highs on most indexes in a fashion that would suggest there is no risk in the market. Yes. - The dangers of too much fiscal and monetary stimulus The SEC's investigation was conducted by David S. Brown, Carol Kim, and Matthew O. Koop and was supervised by Marc J. Blau in the Los Angeles Regional Office. McDonald graduated from Harvard University with a Bachelor's degree in Economics. "There's a disconnect between Main Street and Wall Street, but we had to do it. Hercules Investments has named Loreal McDonald as corporate counsel and interim chief operating officer. Hercules Investments chief investment officer James McDonald used to be a familiar face on CNBC, pontificating about market matters as an expert thereon. With interest rates so low, what do you make of the TINA argument, which asserts there is no alternative to stocks? Required fields are marked *. The case status is Pending - Other Pending. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. Very few recessions and market collapses have recovered in the time period that we saw in 2020. "In our view, index options are a far more efficient and low- cost way to implement growth strategies for client portfolios compared with using funds or individual stocks. The Securities and Exchange Commission today announced the filing of a civil injunctive action against James Arthur McDonald, Jr. and his SEC-registered investment adviser firm, Hercules Investments, LLC in connection with two fraudulent securities offerings. Whats your takeaway from GameStop, AMC, Blackberry, etc.? 2023 FOX News Network, LLC. Or before an SEC investigator. And I think that that will trigger selling of portfolios that have had extensive gains, particularly in the past six months. I'm Jeff Sonn, an attorney concentrating on securities fraud and consumer class actions. Get this delivered to your inbox, and more info about our products and services. Hercules applies quantitative research to design and actively manage portfolios for investors seeking maximum growth during up or down-market cycles. Wealth Management is part of the Informa Connect Division of Informa PLC. Our emphasis is on index options investing around the U.S domestic large indexes, specifically, the S&P 500, the Russell 2000, and Nasdaq 100. My dream is to buy an NFL team. That would be a doubling from the low. He was direct and asked all the questions that were relevant and provided me with very thoughtful feedback and some useful contacts. Key stock indexes, which are market cap based, are near record highs. And, also, relatedly and with the prospect of decades in prison attach, conspiracy and fraud. Fri, Feb 12. Hercules Investments provides a growth option for investors who need gains and growth, but we offer an element of downside risk protection because equity markets are disconnected from what we know is GDP contraction, debt, and all the uncertainty that comes along with a mutating virus. By Greg Bartalos February 05, 2021 James McDonald (Courtesy photo) One hundred million viewers are expected to tune into Sunday's Super Bowl between the defending champion Kansas City Chiefs and Tampa . $0 BAHAMAS 386 (SG458) - Alexander Graham Bell (pb10456) Stamps Caribbean Bahamas (1973-Now) The complaint also charges McDonald with violating Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder, which prohibit certain transactions by investment advisers. Lets start with your macro view. Covid-19 continues to spread rapidly and the vaccine rollout has been slower-than-expected, which is a worrisome combination for the economy and the stock market., The discussion will be streamed via Zoom at this link: https://us02web.zoom.us/webinar/register/WN_guvDkdmgQcy4-HcSuTnb1Q. Charles Canter will lead the litigation. James McDonald is a 25-year veteran of the investment industry and was named one of America's top 10 investment advisors by ETF.com in 2012. James Arthur McDonald Jr., 50, was charged with a single fraud count and could face up to 20 years in prison if convicted, the U.S. attorney's office said in a statement. To what extent do multiples deserve to be elevated given ultralow interest rates? I would be thrilled to buy the Washington football team because I grew up in Chevy Chase, Maryland. The bear case is that the effects of the shutdowns havent fully been realized yet. Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox. "Robust, quant driven investment strategies are typically only available to Ultra High Net Worth individuals and families with $25 million or more to invest. Furthermore, index options provide compelling risk/return profiles with substantially less risk and volatility than their stock option counterparts.". AssetMark CEO Charles Goldman tells RIA Intel that he is focused on acquisitions, helping advisors, and the long term. [USA Today]. Hercules Investments specializes in actively managed and systematic investment strategies to monetize investment performance from equity market volatility. Fox News Flash top headlines for September 22. Meanwhile, sophisticated investors including institutional firms, insurance companies, and ultra-high net worth individuals have sought higher returns during growth phases and greater protection during recessionary phases by utilizing derivatives, particularly options," said James McDonald, who also serves as the firm's Chief Investment Officer. These filings are called "notice filings". Today, James not only discusses all things volatility but also explains different risk-related techniques professionals can use to keep clients comfortable with their portfolios in the market.. Strategy Voice Associates, LLC 4 . Prior to ISA he was Director of Strategic Initiatives for the $12 billion AUM Compass BBVA Wealth Management Group where he led the design and execution of brokerage, trust, and insurance strategies serving high net worth and ultra-high net worth clients. James McDonald, CEO of Hercules Investments, is using equity index options to profit from an expected surge in volatility and market swings. The SEC filed a civil injunctive action against James Arthur McDonald, Jr. and Hercules Investments, LLC in relation to fraudulent securities offerings. His demeanor was professional and pleasant and I would not hesitate to use him in future matters. If you or your loved one experienced investment losses, we are here to help. or redistributed. Scott Gamm South Ozone Park, New York, United States View. In fairness to James McDonald, television is a much more welcoming venue than an SEC hearing room or courthouse. CHICAGO JUDGE DENIES BAIL FOR ILLINOIS WOMAN WHO ALLEGEDLY PUSHED 3-YEAR-OLD NEPHEW INTO LAKE MICHIGAN. Absolutely. The actual profits that have been generated and the guidance that has increased are based on a small section of the market. The ideal client would have a portfolio of stocks that have appreciated with the market and while offering great growth potential is susceptible to a market downturn. Are you suggesting that widespread economic weakness will eventually bubble up to drag down these indexes? CHICAGO--(BUSINESS WIRE)--James McDonald, CEO and Chief Investment Officer of Hercules Investments, a Los Angeles-based Registered Investment Advisor, is hosting a virtual event, Preparing Investment Portfolios for a 2021 Stock Market Crash, on Thursday, January 14, 2021 at 3pm EST. JAMES A MCDONALD JR Agent Address 1718 HARRIMAN LN, REDONDO BEACH, CA, 90278 Directors / Officers JAMES A MCDONALD JR, agent Registry Page https://bizfileonline.sos.ca.gov/sear. Employment levels have increased slightly, but we are artificially keeping our economy going with stimulus checks and obviously all of the Feds actions. Unlike hedge funds, however, a mutual fund is accessible to individual investors and their advisors in a very transparent package. Hercules CEO, CNBC Pundit 'In Hiding' Amid Securities Fraud Charges James Arthur McDonald Jr. appears to be on the lam as he faces as much as 20 years in prison for allegedly defrauding. "-Sonn Law Group Client. - Strategies to profit from a stock market decline Ainslie Simmonds Vision for Pershing X, a Startup Out to Replace Advisor Tech Stacks, Economist Jason Furman Explains How Inflation Snuck Up on Us and Whats Ahead in 2022, A Mountaineer CEO Talks Infinity Multiples, Thrill-Seeking, and How Advisors Need to Change, Modern Slavery Act Transparency Statement. Its clock-striking-midnight dealmaking time at the Justice Department. This Book Changed My Life, Fifteen Must-Listen Business Podcasts for Advisors, Celebrity Estates: Jay Leno and Planning for Classic Car Collections. The SEC further alleges that, from February 2021 to October 2021, McDonald raised $1.5 million through the sale of equity investments in Hercules's business. Our specialization in volatility is what sets us apart because there are many funds and strategies which offer potential gains in a declining market, but as passive indexes or passive strategy, they are bound to lose money when markets are flat or rising. And we know that this isnt how a strong economy operates. Check out what's clicking on Foxnews.com. Of course, like most of the people brought on by CNBC to explain how the market will react to certain things (like talking heads on any subject on any 24-hour news channel), being generally right about those things was not a booking requirement. McDonald graduated from Harvard University with a Bachelors degree in Economics. Hercules offers qualified clients market neutral portfolio management executed primarily through domestic index options. PHILADELPHIA COP WHO SHOT UNARMED BLACK MOTORIST BEGINS TRIAL. Hercules Investments was founded by James McDonald, who previously was founder and CEO of Index Strategy Advisors. Now he's wanted on fraud charges. 2023 FOX News Network, LLC. Our strategies offer downside protection and even potential upside gains with protracted market downturns. Im a football player disguised as a portfolio manager. Fox News Flash top headlines are here. Unless you are aiming for simultaneous knocks on the door from the FBI, SEC and CFTC. How Should HNW Investors Think About Them? [Like this article? This fund is for qualified investors only. The United States Securities and Exchange Commission subpoenaed McDonald to testify before it in November 2021, but - without advance notice - he failed to appear as required. 2023 Informa USA, Inc., All rights reserved, In this episode, David Armstrong, editor-in-chief at. The SEC further alleges that, from February 2021 to October 2021, McDonald raised $1.5 million through the sale of equity investments in Herculess business. One hundred million viewers are expected to tune into Sundays Super Bowl between the defending champion Kansas City Chiefs and Tampa Bay Buccaneers. Mutual Fund and ETF data provided by Refinitiv Lipper. James McDonald, CEO and Chief Investment Officer of Hercules Investments, a Los Angeles-based Registered Investment Advisor, is hosting a virtual event, 'Preparing Investment Portfolios for a . Number 8860726. The equity markets have behaved puzzlingly well in 2020 with the backdrop of a global pandemic and lots of uncertainty around the evolution of the coronavirus and its impact on small businesses, households, and way of life.
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