There are hundreds of companies in the small cap space that dont have the cash to pay their debt. 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. 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." This funds fees accelerate when its performance accelerates. 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. My dream is to buy an NFL team. Small businesses are suffering tremendously, and theyre always going to be the engine of growth for the economy. 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. Do you still have a 15,000 target on the Dow? Below are the states with which the firm you selected makes its notice filings. Moneys thrown into the stock market, not just big caps, theres a whole surge of investing that weve seen, maybe with the beginning of the online trading movement, where there are pockets of individual investors who have moved into investing in a way that is creating tons of frothiness. This material may not be published, broadcast, rewritten, The CEO and chief investment officer of Hercules Investment, a Los Angeles-based RIA, saw his college football career cut short by a catastrophic knee injury that sidelined him for 15 years. Hercules Investments' James McDonald explains the different risk-related techniques advisors can use to keep clients comfortable with their portfolios. GESCO is a security company operating in various fields and basing on the principle of physical protection. Hercules Investments was founded by James McDonald, who previously was founder and CEO of Index Strategy Advisors. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. Hercules Investments specializes in actively managed and systematic investment strategies to monetize investment performance from equity market volatility. Sign up for free newsletters and get more CNBC delivered to your inbox. Now he's wanted on fraud charges. South Ozone Park, New York, United States View. Lets call it artificial income and artificial credit for small businesses that are keeping the economy alive. Wealth Management is part of the Informa Connect Division of Informa PLC. The actual profits that have been generated and the guidance that has increased are based on a small section of the market. // Disclaimer. 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. But I think that the market will rebound and potentially finish the year slightly higher. With only a few times in history have we had a gap even approaching these levels of GDP growth, equity market prices, corporate profits, equity market prices and PE ratios. You've successfully subscribed to this newsletter! We fight to level the playing field between large corporations and the public investor. 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. Now, there are a handful of companies that have flourished in the Covid era, but its a handful of companies. 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. Because in addition to unemployed, he can also now call himself whistleblower.. Scott Gamm Subscribe to RIA Intels thrice-weekly newsletter.]. I'm Jeff Sonn, an attorney concentrating on securities fraud and consumer class actions. 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. 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. 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. Additionally, McDonald raised $1.5 million through equity investment sales in Hercules business while lying, failing to disclose important facts, and more. A CNBC spokesperson told USA TODAY the network no longer allowed McDonald on the air as soon it found out he was under investigation. A frequent lecturer and conference speaker, he is a nationally-recognized expert on the topics of macroeconomics, event-driven investing, growth investing, portfolio construction, index investing, exchange-traded funds, digital currencies, and index . The economy is slowly reopening and more vaccines are reaching people. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. 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. This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Arcadia Man Charged with Securities Fraud for Stealing Client Funds and Concealing His Investment Firms Massive Financial Losses [press release]He appeared as a financial expert on TV. Ryan Thomas Gosling (born November 12, 1980) is a Canadian actor. Registered in England and Wales. It wasn't immediately clear whether he had an attorney who could speak on his behalf. According to the. And what were seeing now is bull market enthusiasm and all types of signs of bubbles in asset prices. 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. Market data provided by Factset. or redistributed. The breadth of risk is extremely wide. (Jun 1986 - Sep 2016) 101 Royal Park Dr. Oakland Park, FL 33309. But stimulating growth is impossible if the economy isnt open. Having traded more than $10 billion worth of options in his 26-year career, McDonald says speculative excess is rampant, citing bitcoin, the SPAC boom, Reddit/GameStop, and elevated valuations. PDF Case Plaintiff Defendant - United States Courts Early life James McDonald was born in Wellhead, Morayshire, in north Scotland on September 23 1840. McDonald graduated from Harvard University with a Bachelors degree in Economics. In a portfolio with a beta of one, one would enjoy virtually 100% downside protection with an allocation of 15% to the Hercules fund. Today, his ambition is to own a NFL team. Youre describing a giant disconnect between the markets and small businesses that are in a world of hurt. 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. 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. 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. Your email address will not be published. In summary, NFLHX provides direct access to risk hedged growth adding a layer of insurance to a portfolio that has appreciated with the market. 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 For a free consultation, please call us now at 866-827-3202or complete ourcontact form. Things are escalating quickly for the folks behind StraightPath Venture Partners. RIA Intel is part of the Euromoney Institutional Investor PLC group. 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 . This Book Changed My Life, Fifteen Must-Listen Business Podcasts for Advisors, Celebrity Estates: Jay Leno and Planning for Classic Car Collections. Please note: We are unable to take cases with losses of less than $50,000. "-Sonn Law Group Client. To send us an e-mail, simply complete and submit the online form below. Market data provided by Factset. McDonald, who lived in the Los Angeles suburb of Arcadia, is believed to be in hiding, the statement said. 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. Questions? [USA Today]. 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. 4 . 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. All Rights Reserved. I think all the equity markets are so overstretched that when a risk element enters the market, the selling will be violent and accelerated. He appeared as a financial expert on TV. . In a parallel action, the United States Attorneys Office for the Central District of California announced criminal charges against McDonald. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. The SEC's complaint, which was filed in the Central District of California, charges McDonald and Hercules 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. In this episode, David Armstrong, editor-in-chief at WealthManagement.com, talks to Hercules Investments James McDonald. 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. 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. Thats why our ticker is NFLHX. 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. Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. Contact me online or call anytime at 844-689-5754. We deliver these strategies through NFLHX. Fox News Flash top headlines are here. 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. Then its fine. The Hercules investment team features investment professionals averaging over 20+ years of experience . 2023 RIA Intel, an Institutional Investor Publication. 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. The case status is Pending - Other Pending. 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. 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. In fairness to James McDonald, television is a much more welcoming venue than an SEC hearing room or courthouse. 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. Furthermore, index options provide compelling risk/return profiles with substantially less risk and volatility than their stock option counterparts.". I really enjoyed speaking with you and appreciate you taking the time. 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. Number 8860726. Get this delivered to your inbox, and more info about our products and services. Yes. This case was filed in Los Angeles County Superior Courts, Norwalk Courthouse located in Los Angeles, California. Now he's wanted on fraud charges. 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. According to the complaint, McDonald also appears to have terminated his previous phone and email accounts and told one person that he planned to vanish.. We do this because we invest in index options, which give us the flexibility to purchase contracts that rise in value when markets fall and to own very misunderstood and often overlooked asset class volatility. To what extent do multiples deserve to be elevated given ultralow interest rates? The Fund seeks to implement very short-term long and short positions in call and put options on the main US stock . 2023 FOX News Network, LLC. Instead, the SEC alleges, McDonald 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. When facing allegations such as these, its best not to be seen on TV. Hercules offers qualified clients market neutral portfolio management executed primarily through domestic index options. Or before an SEC investigator. Lets wrap up with football. WealthManagement.com Staff | Nov 05, 2020. I think the phenomena is an anomaly like virtually every pocket of life were in right now. The Hercules Fund aims to generate positive returns during times of rising and falling stock markets. Whats the bear case predicated on? Volatility itself could be owned through a number of securities. McDonald was CEO of Index Strategy Advisors from 2010 until 2019, when he founded Hercules, which offers market neutral portfolio management, while specializing in high-growth equity index options for clients. McDonald will discuss why investors should be prepared for a looming 2021 stock market crash, after an unprecedented stock market surge since the March 2020 Covid-19-driven stock market lows. Hi, James. - 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. And I think that that is much of whats happened in the macro as well. One hundred million viewers are expected to tune into Sundays Super Bowl between the defending champion Kansas City Chiefs and Tampa Bay Buccaneers. Very few recessions and market collapses have recovered in the time period that we saw in 2020. Web page addresses and e-mail addresses turn into links automatically. And so, we had that crash and then the desire and the interest in moving back forward. 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. The network no longer allowed McDonald on the main us stock the playing field between large corporations and public... Are based on a small section of the market he can also now himself. 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