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,. Federal prosecutors charged McDonald with one count of. Each client and each clients case is unique, and no result or outcome is or can ever be guaranteed. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against McDonald and Hercules. The SEC filed a civil injunctive action against James Arthur McDonald, Jr. and Hercules Investments, LLC in relation to fraudulent securities offerings. 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. 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. Hercules Investments' James McDonald explains the different risk-related techniques advisors can use to keep clients comfortable with their portfolios. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. "Robust, quant driven investment strategies are typically only available to Ultra High Net Worth individuals and families with $25 million or more to invest. If you or your loved one experienced investment losses, we are here to help. Very few recessions and market collapses have recovered in the time period that we saw in 2020. Describe the ideal client profile. Whats the bear case predicated on? And when we look at unemployment now, we say its recovered, but the recovery hasnt brought sufficient growth. 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 would be thrilled to buy the Washington football team because I grew up in Chevy Chase, Maryland. 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. Unlike hedge funds, however, a mutual fund is accessible to individual investors and their advisors in a very transparent package. Which was great for McDonald, because he apparently really muffed the market response to a Joe Biden victory over Donald Trump two years ago: He assumed that the ousting of an incompetent demagogue would tank things. This case was filed in Los Angeles County Superior Courts, Norwalk Courthouse located in Los Angeles, California. 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. 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. 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. A CNBC spokesperson told USA TODAY the network no longer allowed McDonald on the air as soon it found out he was under investigation. 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. Then its fine. 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. All rights reserved. (Fox News). Its not a doomsday picture, but markets are priced right now as if all economic engines are fully up and running. Today, his ambition is to own a NFL team. Lets wrap up with football. 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. PHILADELPHIA COP WHO SHOT UNARMED BLACK MOTORIST BEGINS TRIAL. Legal Statement. Lets start with your macro view. 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.. 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. You've successfully subscribed to this newsletter! *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. In a portfolio with a beta of one, one would enjoy virtually 100% downside protection with an allocation of 15% to the Hercules fund. We want to hear from you. Our employees and their family members enjoyed a wonderful time together this morning at PureTrack in Anaheim, CA! Our ability to monetize volatility is exceptional as evidenced by our winning WealthManagement.coms 2020 Wealthies Award as top Alternative Asset Manager. 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. 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. 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 . All material subject to strictly enforced copyright laws. The Judge overseeing this case is MARGARET MILLER BERNAL. 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. Do you have your eyes on any team per se? More on that later. All rights reserved. Accounting and Auditing Enforcement Releases. Subscribe to RIA Intels thrice-weekly newsletter and follow the publication on Twitter and LinkedIn. 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. 2023 RIA Intel, an Institutional Investor Publication. I played semi-pro football for 12 years. "There's a disconnect between Main Street and Wall Street, but we had to do it. Charles Canter will lead the litigation. 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. 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 . 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. I think we will have another risk event that pulls the market down. "These are incredibly uncertain times for the stock market and for investors," said James. 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. RIA Intel is part of the Euromoney Institutional Investor PLC group. The case status is Pending - Other Pending. Registered in England and Wales. He was direct and asked all the questions that were relevant and provided me with very thoughtful feedback and some useful contacts. The economy is slowly reopening and more vaccines are reaching people. Absolutely. Youre describing a giant disconnect between the markets and small businesses that are in a world of hurt. Required fields are marked *. For more information, please visit: https://hercules-investments.com/hercules-public/index.html, Media Contact 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. 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. 2023 FOX News Network, LLC. 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. Scott Gamm 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. 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 . Hercules' portfolios are designed to achieve aggressive gains whether markets are rising or falling. We had to save the economy from going off the cliff with us not being able to operate as normal," McDonald said. Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. 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. Data is a real-time snapshot *Data is delayed at least 15 minutes. Yeah. - Strategies to profit from a stock market decline Fox News Flash top headlines are here. Tune in to discover different ways that Hercules Investments can provide you with overlay strategies while giving you market volatility protection! 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. On 11/16/2021 HERCULES INVESTMENTS, LLC filed a Contract - Business lawsuit against DANNY MICHAEL CORRAL. 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. GESCO is a security company operating in various fields and basing on the principle of physical protection. We fight to level the playing field between large corporations and the public investor. For a free consultation, please call us now at 866-827-3202or complete ourcontact form. Also on Wednesday, the U.S. Securities and Exchange Commission filed a civil complaint charging McDonald and Hercules with violations of federal securities law. GESCO combines international experience and quality standards with modern technologies and opportunities and local professional service. This field is for validation purposes and should be left unchanged. The bear case is that the effects of the shutdowns havent fully been realized yet. 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. This funds fees accelerate when its performance accelerates. 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 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. I think the phenomena is an anomaly like virtually every pocket of life were in right now. 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. Thats why our ticker is NFLHX. The PE has risen by about 50% from a year ago. 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. For more information, please see www.hercules-investments.com, Media Contact: Matt Yemma Peaks Strategies 909-633-9396 [emailprotected], Cision Distribution 888-776-0942 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." 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. My dream was always to play in the NFL and thats going to be my ticket. A Division of NBCUniversal. 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. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. These filings are called "notice filings". 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. The potential for growth is there, but the conditions for growth are not because we are artificially providing income. He earned a bachelor's degree in economics from Harvard University. Things are escalating quickly for the folks behind StraightPath Venture Partners. I think we will retest the previous lows of last March before buying comes back in. 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. Get James McDonald's email address (j*****@post.harvard.edu) and phone number (718848..) at RocketReach. McDonald also allegedly raised over $3.5 million for securities trades through . Quotes displayed in real-time or delayed by at least 15 minutes. And so, the gains that weve seen have come based on an enthusiasm and optimism placed across the entire market. When facing allegations such as these, its best not to be seen on TV. https://www.wealthmanagement.com/sites/wealthmanagement.com/files/logos/Wealth-Management-Logo-white.png. 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. Wealth Management is part of the Informa Connect Division of Informa PLC. How does it factor into your life? 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. So, I think over 75% of the gains in the S&P 500 in 2020 could be attributed to a handful of names. To what extent do multiples deserve to be elevated given ultralow interest rates? The Hercules investment team features investment professionals averaging over 20+ years of experience . All Rights Reserved. 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. And, now that you, the Justice Department and the SEC mention it, a lot of his stories sound a bit hard to believe. 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. Buckhead Tower, Suite 400 3399 Peachtree Rd. To send us an e-mail, simply complete and submit the online form below. Additionally, McDonald raised $1.5 million through equity investment sales in Hercules business while lying, failing to disclose important facts, and more. But stimulating growth is impossible if the economy isnt open. 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. Fair question. In the S&P 500, you have mega cap tech Covid winners like Microsoft, Amazon, etc. NE Atlanta, GA 30326 *by appointment only. 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