Thats why our ticker is NFLHX. 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,. This site contains attorney advertising. Quotes displayed in real-time or delayed by at least 15 minutes. https://www.wealthmanagement.com/sites/wealthmanagement.com/files/logos/Wealth-Management-Logo-white.png. Legal Statement. To ensure the most secure and best overall experience on our website, we recommend the latest versions of, https://us02web.zoom.us/webinar/register/WN_guvDkdmgQcy4-HcSuTnb1Q, https://hercules-investments.com/hercules-public/index.html. How Should HNW Investors Think About Them? RIA Intel is part of the Euromoney Institutional Investor PLC group. What the Fed did was to protect the economy from going into the abyss. 4 . 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. Hi, James. This fund is for qualified investors only. The leader of Pershing X explains why her experience, leadership style, and the support of BNY Mellon, have positioned the new venture to disrupt how wealth managers do business. So, I got to root for Tom Brady because any 40-plus football player is one I admire. A Division of NBCUniversal. The attorneys at ChapmanAlbin are licensed to practice law in Ohio and Michigan. The Judge overseeing this case is MARGARET MILLER BERNAL. And so, if the market falls say 10%, our allocations will potentially offset the losses in the long only portfolio. Get James McDonald's email address (j*****@post.harvard.edu) and phone number (718848..) at RocketReach. 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. Lines and paragraphs break automatically. I think all the equity markets are so overstretched that when a risk element enters the market, the selling will be violent and accelerated. So, I think over 75% of the gains in the S&P 500 in 2020 could be attributed to a handful of names. 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. Fri, Feb 12. Previously, McDonald was of counsel to Gary, Williams, Parenti, Watson & Gary, P.L.LC. Then its fine. 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. 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. We fight to level the playing field between large corporations and the public investor. The breadth of risk is extremely wide. To send us an e-mail, simply complete and submit the online form below. I think the phenomena is an anomaly like virtually every pocket of life were in right now. For more information, please visit: https://hercules-investments.com/hercules-public/index.html, Media Contact 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. We want to hear from you. And we know that this isnt how a strong economy operates. 2023 CNBC LLC. 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. In the S&P 500, you have mega cap tech Covid winners like Microsoft, Amazon, etc. This Book Changed My Life, Fifteen Must-Listen Business Podcasts for Advisors, Celebrity Estates: Jay Leno and Planning for Classic Car Collections. 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 . 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. This field is for validation purposes and should be left unchanged. In a portfolio with a beta of one, one would enjoy virtually 100% downside protection with an allocation of 15% to the Hercules fund. All Rights Reserved. Now he's wanted on fraud charges. 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. GESCO is a security company operating in various fields and basing on the principle of physical protection. Fox News Flash top headlines are here. Your email address will not be published. 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. 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. "Robust, quant driven investment strategies are typically only available to Ultra High Net Worth individuals and families with $25 million or more to invest. Contact our office today to discuss your case. Hercules applies quantitative research to design and actively manage portfolios for investors seeking maximum growth during up or down-market cycles. One hundred million viewers are expected to tune into Sundays Super Bowl between the defending champion Kansas City Chiefs and Tampa Bay Buccaneers. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. And weve seen, recent examples of how the concentrated energy of small investors can make headlines. 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." That would be a doubling from the low. A conversation about economies, markets, wage inequality, Congress, crypto, and more. (Fox News). WealthManagement.com Staff | Nov 05, 2020. South Ozone Park, New York, United States View. PDF Case Plaintiff Defendant - United States Courts Early life James McDonald was born in Wellhead, Morayshire, in north Scotland on September 23 1840. But stimulating growth is impossible if the economy isnt open. But I think that the market will rebound and potentially finish the year slightly higher. The uncertainty around COVID-19 and risks of rising inflation were the impetus for launching the fund. My intention when I buy my team is to get on the practice field and hit those guys! Powered and implemented by FactSet Digital Solutions. Do you have your eyes on any team per se? The actual profits that have been generated and the guidance that has increased are based on a small section of the market. 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. Powered and implemented by FactSet Digital Solutions. Small businesses are suffering tremendously, and theyre always going to be the engine of growth for the economy. 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. There are hundreds of companies in the small cap space that dont have the cash to pay their debt. We are able to provide uncorrelated growth, meaning our strategies do not depend on equity markets continuing to rise in order to accomplish gains. The SEC appreciates the assistance of the U.S. Attorney's Office, the Federal Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation Division. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. 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. Quotes displayed in real-time or delayed by at least 15 minutes. James Arthur McDonald Jr., 50, ran two Los Angeles-based investment firms called Hercules Investments and Index Strategy Advisors. 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. And what were seeing now is bull market enthusiasm and all types of signs of bubbles in asset prices. 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 . CHICAGO JUDGE DENIES BAIL FOR ILLINOIS WOMAN WHO ALLEGEDLY PUSHED 3-YEAR-OLD NEPHEW INTO LAKE MICHIGAN. In a parallel action, the United States Attorney's Office for the Central District of California announced criminal charges against McDonald. 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 . Below are the states with which the firm you selected makes its notice filings. Yes. It is a risk-hedged growth mutual fund that captures market appreciation and has the potential for great gains when markets fall. The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against McDonald and Hercules. It wasn't immediately clear whether he had an attorney who could speak on his behalf. It means that sentiment and greed can move a market in the face of asking for fundamental justification in the short term. We represent investors in claims against negligent brokers and brokerage firms. And so, the breadth of success is extremely narrow. Youre describing a giant disconnect between the markets and small businesses that are in a world of hurt. James McDonald, CEO of Hercules Investments, is using equity index options to profit from an expected surge in volatility and market swings. Hercules Investments specializes in actively managed and systematic investment strategies to monetize investment performance from equity market volatility. 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. Because in addition to unemployed, he can also now call himself whistleblower.. 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. Greg Bartalos (@gregorianchance) is editor of New York City-based RIA Intel. 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. Ryan Thomas Gosling (born November 12, 1980) is a Canadian actor. His demeanor was professional and pleasant and I would not hesitate to use him in future matters. 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. Subscribe to RIA Intels thrice-weekly newsletter and follow the publication on Twitter and LinkedIn. Any reference to past cases or successes made herein should not be construed as a guarantee of any future outcome. And while recognizing that each investors needs are distinct, on balance what percentage of a portfolio should this comprise? 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. The SEC filed a civil injunctive action against James Arthur McDonald, Jr. and Hercules Investments, LLC in relation to fraudulent securities offerings. For a free consultation, please call us now at 866-827-3202or complete ourcontact form. Our strategies offer downside protection and even potential upside gains with protracted market downturns. 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. In summary, NFLHX provides direct access to risk hedged growth adding a layer of insurance to a portfolio that has appreciated with the market. 2023 RIA Intel, an Institutional Investor Publication. All rights reserved. Lets wrap up with football. Mutual Fund and ETF data provided by Refinitiv Lipper. 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. 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. The gap between corporate profits and GDP, or even corporate profits and equity market prices, is wider than its ever been by a long way. 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. Or before an SEC investigator. Hercules Investments was awarded the WealthManagement.com 2020 Alternative Asset Manager of the year. from 8 AM - 9 PM ET. Subscribe to RIA Intels thrice-weekly newsletter.]. 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. In reality, McDonald used less than half of those funds for trading and did not engage in any trading with the funds for long stretches of time. Are you suggesting that widespread economic weakness will eventually bubble up to drag down these indexes? The Fund seeks to implement very short-term long and short positions in call and put options on the main US stock . Now, there are a handful of companies that have flourished in the Covid era, but its a handful of companies. And, also, relatedly and with the prospect of decades in prison attach, conspiracy and fraud. 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 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. Legal Statement. [Like this article? A CNBC spokesperson told USA TODAY the network no longer allowed McDonald on the air as soon it found out he was under investigation. Each client and each clients case is unique, and no result or outcome is or can ever be guaranteed. In fairness to James McDonald, television is a much more welcoming venue than an SEC hearing room or courthouse. Our objective is to generate $10 billion for our clients in order for me to buy my football team. Small section of the year WHO could speak on his behalf is using equity Index options to profit from expected! 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