Today, his ambition is to own a NFL team. Are you suggesting that widespread economic weakness will eventually bubble up to drag down these indexes? Strategy Voice Associates, LLC 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 Hercules Fund aims to generate positive returns during times of rising and falling stock markets. 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. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. In fairness to James McDonald, television is a much more welcoming venue than an SEC hearing room or courthouse. All rights reserved. The fund is for qualified investors only, and as such mimics many of the features of a hedge fund strategy. Things are escalating quickly for the folks behind StraightPath Venture Partners. In 2005 he purchased the Houston Wolverines (the Texas Wolverines today), a semi-pro football team, and played for 13 years. And when we look at unemployment now, we say its recovered, but the recovery hasnt brought sufficient growth. McDonald, who lived in the Los Angeles suburb of Arcadia, is believed to be in hiding, the statement said. The SEC filed a civil injunctive action against James Arthur McDonald, Jr. and Hercules Investments, LLC in relation to fraudulent securities offerings. "There's a disconnect between Main Street and Wall Street, but we had to do it. Hi, James. Any reference to past cases or successes made herein should not be construed as a guarantee of any future outcome. Lets call it artificial income and artificial credit for small businesses that are keeping the economy alive. The bear case is that the effects of the shutdowns havent fully been realized yet. Required fields are marked *. My dream is to buy an NFL team. Its like a freight train that cant come to an exact halt without a crash. I really enjoyed speaking with you and appreciate you taking the time. 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. 2023 FOX News Network, LLC. 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. A Division of NBCUniversal. 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. Mr. McDonald previously was CEO/CIO of Index Strategy Advisors Inc. (ISA) from 2010-2019. Unless you are aiming for simultaneous knocks on the door from the FBI, SEC and CFTC. Youre describing a giant disconnect between the markets and small businesses that are in a world of hurt. In a parallel action, the United States Attorneys Office for the Central District of California announced criminal charges against McDonald. Check out what's clicking on Foxnews.com. 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. Hercules' portfolios are designed to achieve aggressive gains whether markets are rising or falling. What the Fed did was to protect the economy from going into the abyss. I would be thrilled to buy the Washington football team because I grew up in Chevy Chase, Maryland. Legal Statement. In this episode, David Armstrong, editor-in-chief at WealthManagement.com, talks to Hercules Investments James McDonald. 4 . Now, there are a handful of companies that have flourished in the Covid era, but its a handful of companies. 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 think we will retest the previous lows of last March before buying comes back in. There are hundreds of companies in the small cap space that dont have the cash to pay their debt. For more information, please visit: https://hercules-investments.com/hercules-public/index.html, Media Contact 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 Fund seeks to implement very short-term long and short positions in call and put options on the main US stock . This funds fees accelerate when its performance accelerates. Powered and implemented by FactSet Digital Solutions. 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. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. This fund is for qualified investors only. 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. With interest rates so low, what do you make of the TINA argument, which asserts there is no alternative to stocks? The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against McDonald and Hercules. 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. CHICAGO JUDGE DENIES BAIL FOR ILLINOIS WOMAN WHO ALLEGEDLY PUSHED 3-YEAR-OLD NEPHEW INTO LAKE MICHIGAN. Actually, he didnt just assume it: He bet his clients money rather heavily on it, and lost them upwards of $40 million doing so. 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. Lets start with your macro view. Greg Bartalos (@gregorianchance) is editor of New York City-based RIA Intel. With the Super Bowl around the corner, who do you want to win and who do you think will win? Scott Gamm He earned a bachelor's degree in economics from Harvard University. Market data provided by Factset. South Ozone Park, New York, United States View. Yeah. According to the. 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. All rights reserved. Hercules Investments was founded by James McDonald, who previously was founder and CEO of Index Strategy Advisors. 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. Then its fine. Arcadia Man Charged with Securities Fraud for Stealing Client Funds and Concealing His Investment Firms Massive Financial Losses. Small businesses are suffering tremendously, and theyre always going to be the engine of growth for the economy. 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. And so, this is artificial. How Should HNW Investors Think About Them? 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.. 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,. More on that later. . So, I think over 75% of the gains in the S&P 500 in 2020 could be attributed to a handful of names. Im going to play on my own team and practice. This case was filed in Los Angeles County Superior Courts, Norwalk Courthouse located in Los Angeles, California. Accounting and Auditing Enforcement Releases. Yes. 165 Broadway 23rd Floor New York City NY, 10006 *by appointment only. We represent investors in claims against negligent brokers and brokerage firms. I think all the equity markets are so overstretched that when a risk element enters the market, the selling will be violent and accelerated. This field is for validation purposes and should be left unchanged. 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. This material may not be published, broadcast, rewritten, 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. On 11/16/2021 HERCULES INVESTMENTS, LLC filed a Contract - Business lawsuit against DANNY MICHAEL CORRAL. 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. James McDonald, CEO and Chief Investment Officer of Hercules Investments, will serve as Portfolio Manager of the Hercules Fund. 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. Our strategies offer downside protection and even potential upside gains with protracted market downturns. 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. And I think that that will trigger selling of portfolios that have had extensive gains, particularly in the past six months. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. 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. In a portfolio with a beta of one, one would enjoy virtually 100% downside protection with an allocation of 15% to the Hercules fund. What should advisors know about your firm and how you can help them? Unlike hedge funds, however, a mutual fund is accessible to individual investors and their advisors in a very transparent package. The PE has risen by about 50% from a year ago. A conversation about economies, markets, wage inequality, Congress, crypto, and more. 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. Thats why our ticker is NFLHX. I'm Jeff Sonn, an attorney concentrating on securities fraud and consumer class actions. We fight to level the playing field between large corporations and the public investor. Please note: We are unable to take cases with losses of less than $50,000. "Robust, quant driven investment strategies are typically only available to Ultra High Net Worth individuals and families with $25 million or more to invest. And debt has spiraled over 50% higher to GDP than where we were last year this time. 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. PHILADELPHIA COP WHO SHOT UNARMED BLACK MOTORIST BEGINS TRIAL. And, now that you, the Justice Department and the SEC mention it, a lot of his stories sound a bit hard to believe. 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. One hundred million viewers are expected to tune into Sundays Super Bowl between the defending champion Kansas City Chiefs and Tampa Bay Buccaneers. His demeanor was professional and pleasant and I would not hesitate to use him in future matters. He argues the stimulus package will fail to rehabilitate the economy and thinks investors are too sanguine about the vaccines rollout, citing logistics and trust issues surrounding the vaccine. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. 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. Get this delivered to your inbox, and more info about our products and services. 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. It wasn't immediately clear whether he had an attorney who could speak on his behalf. The economy is slowly reopening and more vaccines are reaching people. And so, equity market prices are assuming earnings that arent there. 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 so, the breadth of success is extremely narrow. 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. 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. AssetMark CEO Charles Goldman tells RIA Intel that he is focused on acquisitions, helping advisors, and the long term. Our objective is to generate $10 billion for our clients in order for me to buy my football team. scott@strategyvoiceassociates.com, Internet Explorer presents a security risk. 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. 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.
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