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. 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. Wealth Management is part of the Informa Connect Division of Informa PLC. McDonald will also be speaking at The Executives Club of Chicagos 2021 Annual Economic Outlook virtual event on January 14. Any reference to past cases or successes made herein should not be construed as a guarantee of any future outcome. Its not a doomsday picture, but markets are priced right now as if all economic engines are fully up and running. Our employees and their family members enjoyed a wonderful time together this morning at PureTrack in Anaheim, CA! 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. He was direct and asked all the questions that were relevant and provided me with very thoughtful feedback and some useful contacts. 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. Hi, James. 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. Because in addition to unemployed, he can also now call himself whistleblower.. 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. My dream was always to play in the NFL and thats going to be my ticket. Yeah. 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. And while recognizing that each investors needs are distinct, on balance what percentage of a portfolio should this comprise? The SEC filed a civil injunctive action against James Arthur McDonald, Jr. and Hercules Investments, LLC in relation to fraudulent securities offerings. I think the phenomena is an anomaly like virtually every pocket of life were in right now. 2023 FOX News Network, LLC. It is a risk-hedged growth mutual fund that captures market appreciation and has the potential for great gains when markets fall. 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. 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. 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. Questions? Contact me online or call anytime at 844-689-5754. 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. Unlike hedge funds, however, a mutual fund is accessible to individual investors and their advisors in a very transparent package. The S&P 500 is trading at about 23 times projected forward earnings. Do you have your eyes on any team per se? All Rights Reserved. Buckhead Tower, Suite 400 3399 Peachtree Rd. This Book Changed My Life, Fifteen Must-Listen Business Podcasts for Advisors, Celebrity Estates: Jay Leno and Planning for Classic Car Collections. Because bulls point to loads of liquidity, low rates, and solid earnings and guidance. *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. Check out what's clicking on Foxnews.com. Its an all-weather strategy. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. 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. Small businesses are suffering tremendously, and theyre always going to be the engine of growth for the economy. 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. 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. 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. 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. Your email address will not be published. Its like a freight train that cant come to an exact halt without a crash. Tune in to discover different ways that Hercules Investments can provide you with overlay strategies while giving you market volatility protection! Legal Statement. "I spoke to Mr Sonn on a complex legal matter. 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. Below are excerpts from our Jan. 28 discussion, edited for length and clarity. from 8 AM - 9 PM ET. 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. Fair question. A CNBC spokesperson told USA TODAY the network no longer allowed McDonald on the air as soon it found out he was under investigation. Web page addresses and e-mail addresses turn into links automatically. // Disclaimer. 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. Now he's wanted on fraud charges. The potential for growth is there, but the conditions for growth are not because we are artificially providing income. Each client and each clients case is unique, and no result or outcome is or can ever be guaranteed. Hercules applies quantitative research to design and actively manage portfolios for investors seeking maximum growth during up or down-market cycles. But stimulating growth is impossible if the economy isnt open. 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. Quotes displayed in real-time or delayed by at least 15 minutes. Below are the states with which the firm you selected makes its notice filings. But I think that the market will rebound and potentially finish the year slightly higher. Strategy Voice Associates, LLC James McDonald, CEO and Chief Investment Officer of Hercules Investments, will serve as Portfolio Manager of the Hercules Fund. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. Employment levels have increased slightly, but we are artificially keeping our economy going with stimulus checks and obviously all of the Feds actions. All rights reserved. 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. [USA Today]. So, I think over 75% of the gains in the S&P 500 in 2020 could be attributed to a handful of names. 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. We deliver these strategies through NFLHX. The economy is slowly reopening and more vaccines are reaching people. 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 really enjoyed speaking with you and appreciate you taking the time. 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. 2023 Informa USA, Inc., All rights reserved, In this episode, David Armstrong, editor-in-chief at. 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. Number 8860726. Please read our Terms and Conditions, Modern Slavery Act Transparency Statement, and Privacy Policy before using the site. The fund is for qualified investors only, and as such mimics many of the features of a hedge fund strategy. This case was filed in Los Angeles County Superior Courts, Norwalk Courthouse located in Los Angeles, California. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. 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. One hundred million viewers are expected to tune into Sundays Super Bowl between the defending champion Kansas City Chiefs and Tampa Bay Buccaneers. 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." In the S&P 500, you have mega cap tech Covid winners like Microsoft, Amazon, etc. Get 5 free searches. Subscribe to RIA Intels thrice-weekly newsletter.]. Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox. 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. 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. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. What the Fed did was to protect the economy from going into the abyss. And so, we had that crash and then the desire and the interest in moving back forward. 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. The bull case would imply that were 50% stronger in terms of our earnings premium over our equity premium based on what we pay for earnings. Or, you know, anywhere, really. 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. GESCO is a security company operating in various fields and basing on the principle of physical protection. 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. 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. Faces up to 20 years imprisonment if convicted, is believed to be in hiding, the.... Page addresses and e-mail addresses turn into links automatically 2021 Annual Economic Outlook virtual event on January 14 displayed. Priced right now hercules applies quantitative research to design and actively manage portfolios for investors seeking growth. 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