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Subscribe to RIA Intels thrice-weekly newsletter.]. - The dangers of too much fiscal and monetary stimulus 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. Arcadia Man Charged with Securities Fraud for Stealing Client Funds and Concealing His Investment Firms Massive Financial Losses. In a parallel action, the United States Attorneys Office for the Central District of California announced criminal charges against McDonald. Web page addresses and e-mail addresses turn into links automatically. (Fox News). Lines and paragraphs break automatically. Fri, Feb 12. I think the phenomena is an anomaly like virtually every pocket of life were in right now. All material subject to strictly enforced copyright laws. We deliver these strategies through NFLHX. Charles Canter will lead the litigation. James Arthur McDonald Jr., 50, was charged with one count of fraud for bilking clients out of millions of dollars on Sept. 21, 2022. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. Mr. McDonald previously was CEO/CIO of Index Strategy Advisors Inc. (ISA) from 2010-2019. There are hundreds of companies in the small cap space that dont have the cash to pay their debt. 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. 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. Below are the states with which the firm you selected makes its notice filings. In the S&P 500, you have mega cap tech Covid winners like Microsoft, Amazon, etc. 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. Thats my personal mission. This material may not be published, broadcast, rewritten, WealthManagement.com Staff | Nov 05, 2020. 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. Hercules' portfolios are designed to achieve aggressive gains whether markets are rising or falling. And what were seeing now is bull market enthusiasm and all types of signs of bubbles in asset prices. Things are escalating quickly for the folks behind StraightPath Venture Partners. We are partnering with Nasdaq to put Nasdaq 100 Volatility Index (VOLQ) into our portfolio in a way where investors who have realized great gains from tech can rest assured knowing that in the event of a potential market downturn, our fund will be able to sustain the impact of a declining market and should provide upside. And even still, there is the risk of mutations, the continuation of sickness, hospitalizations, and fear will cause stagnation for the reopening concept. Describe the ideal client profile. The Fund seeks to implement very short-term long and short positions in call and put options on the main US stock . In a portfolio with a beta of one, one would enjoy virtually 100% downside protection with an allocation of 15% to the Hercules fund. - Strategies to profit from a stock market decline Its like a freight train that cant come to an exact halt without a crash. Powered and implemented by FactSet Digital Solutions. Required fields are marked *. To send us an e-mail, simply complete and submit the online form below. Lets call it artificial income and artificial credit for small businesses that are keeping the economy alive. McDonald graduated from Harvard University with a Bachelor's degree in Economics. The case status is Pending - Other Pending. 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. GESCO is a security company operating in various fields and basing on the principle of physical protection. 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. *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. 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. 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. This field is for validation purposes and should be left unchanged. The fund is for qualified investors only, and as such mimics many of the features of a hedge fund strategy. Tax Advantages Are a Selling Point for Investment in CRE. 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. Wealth Management is part of the Informa Connect Division of Informa PLC. 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 This field is for validation purposes and should be left unchanged. This site contains attorney advertising. This Book Changed My Life, Fifteen Must-Listen Business Podcasts for Advisors, Celebrity Estates: Jay Leno and Planning for Classic Car Collections. 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 . In 2005 he purchased the Houston Wolverines (the Texas Wolverines today), a semi-pro football team, and played for 13 years. Or, you know, anywhere, really. I think we will have another risk event that pulls the market down. The attorneys at ChapmanAlbin are licensed to practice law in Ohio and Michigan. Registered in England and Wales. 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. You can reach us by phone at 844-689-5754 or via e-mail. Hercules Investments chief investment officer James McDonald used to be a familiar face on CNBC, pontificating about market matters as an expert thereon. And, now that you, the Justice Department and the SEC mention it, a lot of his stories sound a bit hard to believe. That would be a doubling from the low. We had to save the economy from going off the cliff with us not being able to operate as normal," McDonald said. 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. For more information, please see www.hercules-investments.com, Media Contact: Matt Yemma Peaks Strategies 909-633-9396 [emailprotected], Cision Distribution 888-776-0942 [Like this article? 2023 FOX News Network, LLC. When typing in this field, a list of search results will appear and be automatically updated as you type. Whats your takeaway from GameStop, AMC, Blackberry, etc.? This case was filed in Los Angeles County Superior Courts, Norwalk Courthouse located in Los Angeles, California. Fair question. 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. or redistributed. 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. 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." Sign up for free newsletters and get more CNBC delivered to your inbox. Today, his ambition is to own a NFL team. Now he's wanted on fraud charges. 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. And this is evidenced by us being at valuation levels weve never touched before, even higher than 1929 and 2000-2001. 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 Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox. Scott Gamm A Division of NBCUniversal. Our strategies offer downside protection and even potential upside gains with protracted market downturns. 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 . This material may not be published, broadcast, rewritten, or redistributed. https://www.wealthmanagement.com/sites/wealthmanagement.com/files/logos/Wealth-Management-Logo-white.png. With the Super Bowl around the corner, who do you want to win and who do you think will win? McDonald graduated from Harvard University with a Bachelors degree in Economics. Hercules Investments' James McDonald explains the different risk-related techniques advisors can use to keep clients comfortable with their portfolios. And I think that that will trigger selling of portfolios that have had extensive gains, particularly in the past six months. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. 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. When we perform well for the client, we perform well for ourselves. All Rights Reserved. In this virtual event, McDonald shares: - Why the markets are too optimistic about the Covid-19 vaccine Quant Research-Driven Investment Strategies For Investors Seeking Active Portfolio Management. James Arthur McDonald Jr., 50, ran two Los Angeles-based investment firms called Hercules Investments and Index Strategy Advisors. AssetMark CEO Charles Goldman tells RIA Intel that he is focused on acquisitions, helping advisors, and the long term. 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. Furthermore, index options provide compelling risk/return profiles with substantially less risk and volatility than their stock option counterparts.". scott@strategyvoiceassociates.com, Internet Explorer presents a security risk. Then its fine. GESCO combines international experience and quality standards with modern technologies and opportunities and local professional service. The Hercules Fund aims to generate positive returns during times of rising and falling stock markets. Because bulls point to loads of liquidity, low rates, and solid earnings and guidance. 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. Legal Statement. 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. Subscribe to RIA Intels thrice-weekly newsletter and follow the publication on Twitter and LinkedIn. Very few recessions and market collapses have recovered in the time period that we saw in 2020. 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. 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. Tune in to discover different ways that Hercules Investments can provide you with overlay strategies while giving you market volatility protection! 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. Your email address will not be published. The actual profits that have been generated and the guidance that has increased are based on a small section of the market. More on that later. 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. 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,. So, I got to root for Tom Brady because any 40-plus football player is one I admire. Vaccinating the public will not happen as quickly as most expect. In fairness to James McDonald, television is a much more welcoming venue than an SEC hearing room or courthouse. 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 uncertainty around COVID-19 and risks of rising inflation were the impetus for launching the fund. Its clock-striking-midnight dealmaking time at the Justice Department. Our employees and their family members enjoyed a wonderful time together this morning at PureTrack in Anaheim, CA! Employment levels have increased slightly, but we are artificially keeping our economy going with stimulus checks and obviously all of the Feds actions. He appeared as a financial expert on TV. 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. Hercules Investments was awarded the WealthManagement.com 2020 Alternative Asset Manager of the year. Mutual Fund and ETF data provided by Refinitiv Lipper. 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. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. So, I think over 75% of the gains in the S&P 500 in 2020 could be attributed to a handful of names. One hundred million viewers are expected to tune into Sundays Super Bowl between the defending champion Kansas City Chiefs and Tampa Bay Buccaneers. "These are incredibly uncertain times for the stock market and for investors," said James. 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 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. And while recognizing that each investors needs are distinct, on balance what percentage of a portfolio should this comprise? Lets wrap up with football. 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. McDonald also allegedly raised over $3.5 million for securities trades through . 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. 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. He was direct and asked all the questions that were relevant and provided me with very thoughtful feedback and some useful contacts. Actually, he didnt just assume it: He bet his clients money rather heavily on it, and lost them upwards of $40 million doing so. 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 . The PE has risen by about 50% from a year ago. from 8 AM - 9 PM ET. 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. Hercules applies quantitative research to design and actively manage portfolios for investors seeking maximum growth during up or down-market cycles. 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. The bear case is that the effects of the shutdowns havent fully been realized yet. 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. The Hercules investment team features investment professionals averaging over 20+ years of experience . Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. The breadth of risk is extremely wide. He earned a bachelor's degree in economics from Harvard University. Additionally, McDonald raised $1.5 million through equity investment sales in Hercules business while lying, failing to disclose important facts, and more. Get James McDonald's email address (j*****@post.harvard.edu) and phone number (718848..) at RocketReach. Federal prosecutors charged McDonald with one count of. This fund is for qualified investors only. 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. I think we will retest the previous lows of last March before buying comes back in. We fight to level the playing field between large corporations and the public investor. 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. Number 8860726. Hercules offers qualified clients market neutral portfolio management executed primarily through domestic index options. 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. 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. McDonald, who faces up to 20 years imprisonment if convicted, is believed to be in hiding, the U.S. Attorneys office said in a news release. 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. I'm Jeff Sonn, an attorney concentrating on securities fraud and consumer class actions. My intention when I buy my team is to get on the practice field and hit those guys! Address of QUALITY servIce and relIable guarding, We are constantly workIng and developng to mprove our qualIty of servce. 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. 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. Quotes displayed in real-time or delayed by at least 15 minutes. Small businesses are suffering tremendously, and theyre always going to be the engine of growth for the economy. These filings are called "notice filings". How does it factor into your life? 2023 FOX News Network, LLC. And I think that that is much of whats happened in the macro as well. Because in addition to unemployed, he can also now call himself whistleblower.. Questions? Are you suggesting that widespread economic weakness will eventually bubble up to drag down these indexes? The Sonn Law Group is currently investigating allegations surrounding James Arthur McDonald, Jr. or Hercules Investments, LLC. 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.
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