Actually, he didnt just assume it: He bet his clients money rather heavily on it, and lost them upwards of $40 million doing so. Contact our office today to discuss your case. 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. 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. My intention when I buy my team is to get on the practice field and hit those guys! Hercules applies quantitative research to design and actively manage portfolios for investors seeking maximum growth during up or down-market cycles. Now he's wanted on fraud charges. Our employees and their family members enjoyed a wonderful time together this morning at PureTrack in Anaheim, CA! 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. All Rights Reserved. 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. McDonald, who graduated from Harvard University with an economics degree, expects the Dow will tumble more than 50% to 15,000, a prediction he has made several times since March 2020, before surging to new highs this year. Legal Statement. 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. Get James McDonald's email address (j*****@post.harvard.edu) and phone number (718848..) at RocketReach. 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. Market data provided by Factset. Its not a doomsday picture, but markets are priced right now as if all economic engines are fully up and running. 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? Hercules offers qualified clients market neutral portfolio management executed primarily through domestic index options. South Ozone Park, New York, United States View. One hundred million viewers are expected to tune into Sundays Super Bowl between the defending champion Kansas City Chiefs and Tampa Bay Buccaneers. Mr. McDonald previously was CEO/CIO of Index Strategy Advisors Inc. (ISA) from 2010-2019. He last appeared on the network in July 2021. 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. It means that sentiment and greed can move a market in the face of asking for fundamental justification in the short term. James McDonald from Hercules Investments and James Camp, Eagle Asset Management director of strategic income and managing director of fixed income, discuss the impact of the $1.9 trillion. Do you have your eyes on any team per se? Strategy Voice Associates, LLC Mutual Fund and ETF data provided by Refinitiv Lipper. McDonald falsely represented that investor funds would be used to expand Herculess business, lied about the firms financial condition, and failed to disclose that he had promised Hercules clients that the firm would repay earlier losses. Believe It or Not, Its a Great Time To Be a Financial Advisor, Ares Strikes Deal for Office, Naming Rights at Los Angeles Tower, Musks Twitter Sells Off Coffee Makers, Neon Logo in Auction Blitz. What should advisors know about your firm and how you can help them? You can reach us by phone at 844-689-5754 or via e-mail. Hercules Investments CEO/CIO James McDonald. Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. "I spoke to Mr Sonn on a complex legal matter. His demeanor was professional and pleasant and I would not hesitate to use him in future matters. Below are the states with which the firm you selected makes its notice filings. And so, equity market prices are assuming earnings that arent there. Hercules Investments was founded by James McDonald, who previously was founder and CEO of Index Strategy Advisors. Arcadia Man Charged with Securities Fraud for Stealing Client Funds and Concealing His Investment Firms Massive Financial Losses. And we know that this isnt how a strong economy operates. James McDonald, CEO and Chief Investment Officer of Hercules Investments, will serve as Portfolio Manager of the Hercules Fund. Are you suggesting that widespread economic weakness will eventually bubble up to drag down these indexes? Investment adviser firms registered with the SEC may be required to provide to state securities authorities a copy of their Form ADV and any accompanying amendments filed with the SEC. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. The attorneys at ChapmanAlbin are licensed to practice law in Ohio and Michigan. It is a risk-hedged growth mutual fund that captures market appreciation and has the potential for great gains when markets fall. GESCO combines international experience and quality standards with modern technologies and opportunities and local professional service. Hi, James. And so, we had that crash and then the desire and the interest in moving back forward. Mutual Fund and ETF data provided by Refinitiv Lipper. AssetMark CEO Charles Goldman tells RIA Intel that he is focused on acquisitions, helping advisors, and the long term. This fund is for qualified investors only. 4 . I really enjoyed speaking with you and appreciate you taking the time. Lines and paragraphs break automatically. What the Fed did was to protect the economy from going into the abyss. The uncertainty around COVID-19 and risks of rising inflation were the impetus for launching the fund. 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. 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. James McDonald Current Workplace Hercules Investments Location 633 W 5th St Ste 6770, Los Angeles, California, 90071, United States Description Read More Industry Finance General Finance Discover more about Hercules Investments James McDonald Work Experience and Education Work Experience Chief Investment Officer Vishnu Wealth Management 2017-2019 165 Broadway 23rd Floor New York City NY, 10006 *by appointment only. That would be a doubling from the low. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. Additionally, McDonald raised $1.5 million through equity investment sales in Hercules business while lying, failing to disclose important facts, and more. Of course, we know that theres tremendous risk, not just to our health, but to the sustainability of small businesses, to the credit and economic security of households and to the outlook for how we will move forward past the pandemic. And when we look at unemployment now, we say its recovered, but the recovery hasnt brought sufficient growth. WealthManagement.com Staff | Nov 05, 2020. Questions? 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. In a portfolio with a beta of one, one would enjoy virtually 100% downside protection with an allocation of 15% to the Hercules fund. The complaint also alleges that McDonald commingled the investor funds with Herculess assets and his personal assets, and used $440,000 of those funds for personal expenses, including to pay his personal credit card bills. 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. This field is for validation purposes and should be left unchanged. Hercules Investments specializes in actively managed and systematic investment strategies to monetize investment performance from equity market volatility. 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." or redistributed. These filings are called "notice filings". And so, the gains that weve seen have come based on an enthusiasm and optimism placed across the entire market. Because in addition to unemployed, he can also now call himself whistleblower.. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. 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. The bear case is that the effects of the shutdowns havent fully been realized yet. Please read our Terms and Conditions, Modern Slavery Act Transparency Statement, and Privacy Policy before using the site. The Exchange James McDonald's advice to the next generation Hercules Investments CEO and CIO James McDonald offers his advice to the next generation of Black Americans. The PE has risen by about 50% from a year ago. 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. Legal Statement. When typing in this field, a list of search results will appear and be automatically updated as you type. Today, his ambition is to own a NFL team. However, as markets continue to thrive, our fund will not follow the path of other downside protection strategies, passive only strategies, which fall precipitously in rising market. We are able to provide uncorrelated growth, meaning our strategies do not depend on equity markets continuing to rise in order to accomplish gains. In this virtual event, McDonald shares: - Why the markets are too optimistic about the Covid-19 vaccine How does it factor into your life? Prominent in independent film, he has also worked in blockbuster films of varying genres, and has accrued a worldwide box office gross of over 1.9 billion USD.He has received various accolades, including a Golden Globe Award, and nominations for two Academy Awards and a BAFTA Award.. Born and raised in Canada, he rose to . And what were seeing now is bull market enthusiasm and all types of signs of bubbles in asset prices. Very few recessions and market collapses have recovered in the time period that we saw in 2020. To send us an e-mail, simply complete and submit the online form below. The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against McDonald and Hercules. Hercules Investments was founded by James McDonald, who previously was founder and CEO of Index Strategy Advisors. My dream was always to play in the NFL and thats going to be my ticket. NE Atlanta, GA 30326 *by appointment only. Buckhead Tower, Suite 400 3399 Peachtree Rd. The economy is slowly reopening and more vaccines are reaching people. Greg Bartalos (@gregorianchance) is editor of New York City-based RIA Intel. "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. Im a football player disguised as a portfolio manager. (Fox News). James McDonald from Hercules Investments, and James Camp, Eagle Asset Management director of strategic income and managing director of fixed income, join 'The Exchange' to discuss the impact . Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. 2023 RIA Intel, an Institutional Investor Publication. If markets rise, our fund is managed to match or exceed that growth based on our ability to go long or short with index options. 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. No, Brent Kovars mother didnt have an artificial intelligence supercomputer in her basement, the SEC says. The fund is for qualified investors only, and as such mimics many of the features of a hedge fund strategy. The potential for growth is there, but the conditions for growth are not because we are artificially providing income. McDonald graduated from Harvard University with a Bachelors degree in Economics. With this risk in the market, many individual investors have to count on either continued paid stimulus or continued paychecks and loans for small business relief. RIA Intel is part of the Euromoney Institutional Investor PLC group. Lets call it artificial income and artificial credit for small businesses that are keeping the economy alive. Things are escalating quickly for the folks behind StraightPath Venture Partners. The SECs complaint charges McDonald with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. More on that later. James Arthur McDonald Jr., 50, ran two Los Angeles-based investment firms called Hercules Investments and Index Strategy Advisors. PHILADELPHIA COP WHO SHOT UNARMED BLACK MOTORIST BEGINS TRIAL. 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. Required fields are marked *. And, also, relatedly and with the prospect of decades in prison attach, conspiracy and fraud. Wealth Management is part of the Informa Connect Division of Informa PLC. When facing allegations such as these, its best not to be seen on TV. Data is a real-time snapshot *Data is delayed at least 15 minutes. James Arthur McDonald Jr., 50, was charged with one count of fraud for bilking clients out of millions of dollars on Sept. 21, 2022. - Why volatility as an asset class is key for 2021, Its important for investors to be prepared for stock market volatility, as the economic outlook remains fragile in 2021, McDonald said. 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. 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. 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. This case was filed in Los Angeles County Superior Courts, Norwalk Courthouse located in Los Angeles, California. According to the. 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. Resilience is the name of the game, says Mastercard CEO Michael Miebach, We've seen resilience in the U.S. consumer, says Coca-Cola CEO James Quincey, Illinois Governor JB Pritzker: Crime is coming down gradually in the city and it's getting better, Guggenheim CIO: We are predicting the recession to start mid-year, Moderna CEO: We're preparing our FDA filing for our RSV vaccine. 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. 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 allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. 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. For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker. Hercules Investments chief investment officer James McDonald used to be a familiar face on CNBC, pontificating about market matters as an expert thereon. A conversation about economies, markets, wage inequality, Congress, crypto, and more. This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. 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.. So, I got to root for Tom Brady because any 40-plus football player is one I admire. Contact me online or call anytime at 844-689-5754. Im going to play on my own team and practice. 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. 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. Its an all-weather strategy. This Book Changed My Life, Fifteen Must-Listen Business Podcasts for Advisors, Celebrity Estates: Jay Leno and Planning for Classic Car Collections. The case status is Pending - Other Pending. 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. So, I think over 75% of the gains in the S&P 500 in 2020 could be attributed to a handful of names. Below are excerpts from our Jan. 28 discussion, edited for length and clarity. Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox. Its two and 20 (fee arrangement) ensures that our portfolio management is in alignment with the profit objectives of the client. "These are incredibly uncertain times for the stock market and for investors," said James. Thats my personal mission. Do you still have a 15,000 target on the Dow? You've successfully subscribed to this newsletter! With interest rates so low, what do you make of the TINA argument, which asserts there is no alternative to stocks? - Strategies to profit from a stock market decline 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: . The information provided in this website is offered for general information purposes only; it is not offered as and does not constitute legal advice in any way. from 8 AM - 9 PM ET. Our ability to monetize volatility is exceptional as evidenced by our winning WealthManagement.coms 2020 Wealthies Award as top Alternative Asset Manager. When we perform well for the client, we perform well for ourselves. 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. Fox News Flash top headlines are here. James McDonald from Hercules Investments and James Camp, Eagle Asset Management director of strategic income and managing director of fixed income, discuss the impact of the $1.9 trillion coronavirus relief package to the stock and bond markets. Furthermore, index options provide compelling risk/return profiles with substantially less risk and volatility than their stock option counterparts.". Its like a freight train that cant come to an exact halt without a crash. 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. Yeah. Fair question. Lets start with your macro view. The stockbroker and investment fraud lawyers at Sonn Law Group dedicate their entire practice to protecting the interests of investors who have lost money as a result of the negligent or wrongful conduct of those entrusted with protecting and growing our money. 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. 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. "Robust, quant driven investment strategies are typically only available to Ultra High Net Worth individuals and families with $25 million or more to invest. All material subject to strictly enforced copyright laws. The breadth of risk is extremely wide. Your email address will not be published. With the Super Bowl around the corner, who do you want to win and who do you think will win? Its clock-striking-midnight dealmaking time at the Justice Department. In summary, NFLHX provides direct access to risk hedged growth adding a layer of insurance to a portfolio that has appreciated with the market. I think we will have another risk event that pulls the market down. CHICAGO JUDGE DENIES BAIL FOR ILLINOIS WOMAN WHO ALLEGEDLY PUSHED 3-YEAR-OLD NEPHEW INTO LAKE MICHIGAN. Powered and implemented by FactSet Digital Solutions. Charles Canter will lead the litigation. 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 . Scott Gamm A Division of NBCUniversal. This field is for validation purposes and should be left unchanged. Tax Advantages Are a Selling Point for Investment in CRE. Small businesses are suffering tremendously, and theyre always going to be the engine of growth for the economy. And debt has spiraled over 50% higher to GDP than where we were last year this time. McDonald also allegedly raised over $3.5 million for securities trades through the Index Strategy Advisors Fund and misappropriated half of the funds for personal expenses. https://www.wealthmanagement.com/sites/wealthmanagement.com/files/logos/Wealth-Management-Logo-white.png. (Jun 1986 - Sep 2016) 101 Royal Park Dr. Oakland Park, FL 33309. Accounting and Auditing Enforcement Releases. 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,. So, common sense would say, what changed in one year for a 50% premium in a market that most people would agree has been propelled with no monetary policy and stimulus? 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 SEC further alleges that, from February 2021 to October 2021, McDonald raised $1.5 million through the sale of equity investments in Herculess business. And this is evidenced by us being at valuation levels weve never touched before, even higher than 1929 and 2000-2001. First, between May 2019 and October 2021, McDonald, through his control of Index Strategy Advisors, Inc. ("ISA")-an unregistered investment adviser-solicited over $3.6 million from approximately 20 investors for ISA's index hedge fund, the ISA Fund. *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. Hercules' portfolios are designed to achieve aggressive gains whether markets are rising or falling. Contact me online or call anytime at 844-689-5754 SEC Charges James Arthur McDonald, Jr. and His SEC-Registered Investment Adviser Firm, Hercules Investments, LLC with Offering Fraudulent Securities Sonn Law Staff Oct 05, 2022 Posted in Investment Loss Investigations # James Arthur McDonald Jr. The SEC filed a civil injunctive action against James Arthur McDonald, Jr. and Hercules Investments, LLC in relation to fraudulent securities offerings. Hercules Investments was awarded the WealthManagement.com 2020 Alternative Asset Manager of the year. Federal prosecutors charged McDonald with one count of. 2023 Informa USA, Inc., All rights reserved, In this episode, David Armstrong, editor-in-chief at. We fight to level the playing field between large corporations and the public investor. And weve seen, recent examples of how the concentrated energy of small investors can make headlines. 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,. 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 Subscribe to RIA Intels thrice-weekly newsletter and follow the publication on Twitter and LinkedIn. There are hundreds of companies in the small cap space that dont have the cash to pay their debt. "-Sonn Law Group Client. 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. [Like this article? This site contains attorney advertising. In 2005 he purchased the Houston Wolverines (the Texas Wolverines today), a semi-pro football team, and played for 13 years. 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. This material may not be published, broadcast, rewritten, 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. Our objective is to generate $10 billion for our clients in order for me to buy my football team. In a parallel action, the United States Attorney's Office for the Central District of California announced criminal charges against McDonald. And so, if the market falls say 10%, our allocations will potentially offset the losses in the long only portfolio. Now, there are a handful of companies that have flourished in the Covid era, but its a handful of companies.
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