Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. 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 Hercules Investments was awarded the WealthManagement.com 2020 Alternative Asset Manager of the year. These filings are called "notice filings". My intention when I buy my team is to get on the practice field and hit those guys! Whats your takeaway from GameStop, AMC, Blackberry, etc.? I think we will retest the previous lows of last March before buying comes back in. Yes. And so, the gains that weve seen have come based on an enthusiasm and optimism placed across the entire market. Because bulls point to loads of liquidity, low rates, and solid earnings and guidance. Tune in to discover different ways that Hercules Investments can provide you with overlay strategies while giving you market volatility protection! McDonald graduated from Harvard University with a Bachelors degree in Economics. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Furthermore, index options provide compelling risk/return profiles with substantially less risk and volatility than their stock option counterparts.". Quotes displayed in real-time or delayed by at least 15 minutes. The bear case is that the effects of the shutdowns havent fully been realized yet. More on that later. In a parallel action, the United States Attorney's Office for the Central District of California announced criminal charges against McDonald. AssetMark CEO Charles Goldman tells RIA Intel that he is focused on acquisitions, helping advisors, and the long term. 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. You can reach us by phone at 844-689-5754 or via e-mail. 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. Hercules Investments' James McDonald explains the different risk-related techniques advisors can use to keep clients comfortable with their portfolios. 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. We fight to level the playing field between large corporations and the public investor. 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. 2023 FOX News Network, LLC. Please note: We are unable to take cases with losses of less than $50,000. Save my name, email, and website in this browser for the next time I comment. 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. Its not a doomsday picture, but markets are priced right now as if all economic engines are fully up and running. Fox News Flash top headlines for September 22. 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. 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. The SEC filed a civil injunctive action against James Arthur McDonald, Jr. and Hercules Investments, LLC in relation to fraudulent securities offerings. The 10 Best and 10 Worst States in Which to Retire in 2021, Im an Advisor. What the Fed did was to protect the economy from going into the abyss. Quotes displayed in real-time or delayed by at least 15 minutes. So, I got to root for Tom Brady because any 40-plus football player is one I admire. Instead, the SEC alleges, McDonald 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. Im going to play on my own team and practice. Do you still have a 15,000 target on the Dow? He earned a bachelor's degree in economics from Harvard University. 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. You've successfully subscribed to this newsletter! GESCO combines international experience and quality standards with modern technologies and opportunities and local professional service. 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.. Its clock-striking-midnight dealmaking time at the Justice Department. One hundred million viewers are expected to tune into Sundays Super Bowl between the defending champion Kansas City Chiefs and Tampa Bay Buccaneers. Fair question. 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. Legal Statement. - Strategies to profit from a stock market decline 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. And weve seen, recent examples of how the concentrated energy of small investors can make headlines. I think the phenomena is an anomaly like virtually every pocket of life were in right now. Today, his ambition is to own a NFL team. That would be a doubling from the low. Each client and each clients case is unique, and no result or outcome is or can ever be guaranteed. 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. Mutual Fund and ETF data provided by Refinitiv Lipper. To what extent do multiples deserve to be elevated given ultralow interest rates? 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. This field is for validation purposes and should be left unchanged. My dream was always to play in the NFL and thats going to be my ticket. To be clear, you expect a risk event this year will take the Dow down to 15,000 but by year end it will finish higher than today? 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. Powered and implemented by FactSet Digital Solutions. 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 emphasis is on index options investing around the U.S domestic large indexes, specifically, the S&P 500, the Russell 2000, and Nasdaq 100. I think all the equity markets are so overstretched that when a risk element enters the market, the selling will be violent and accelerated. Questions? We are able to provide uncorrelated growth, meaning our strategies do not depend on equity markets continuing to rise in order to accomplish gains. 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. McDonald also allegedly raised over $3.5 million for securities trades through . Very few recessions and market collapses have recovered in the time period that we saw in 2020. 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 . How Hercules Investments capitalizes on systematic volatility; The companys risk-hedging technique designed to help financial advisors and clients; How James McDonalds firm helps financial advisors grow their prospects; Hercules Investments ideal client as those who got aggressive growth goals; Allowed HTML tags: . The fund is for qualified investors only, and as such mimics many of the features of a hedge fund strategy. In fairness to James McDonald, television is a much more welcoming venue than an SEC hearing room or courthouse. 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. Number 8860726. [Like this article? The breadth of risk is extremely wide. Our objective is to generate $10 billion for our clients in order for me to buy my football team. 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. 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. 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. Below are excerpts from our Jan. 28 discussion, edited for length and clarity. Because in addition to unemployed, he can also now call himself whistleblower.. 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. When facing allegations such as these, its best not to be seen on TV. Sign up for free newsletters and get more CNBC delivered to your inbox. I would be thrilled to buy the Washington football team because I grew up in Chevy Chase, Maryland. A conversation about economies, markets, wage inequality, Congress, crypto, and more. 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. Federal prosecutors charged McDonald with one count of. - The dangers of too much fiscal and monetary stimulus Absolutely. 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. James Arthur McDonald Jr., 50, was charged with a single fraud count and could face up to 20 years in prison if convicted, the U.S. attorney's office said in a statement. The actual profits that have been generated and the guidance that has increased are based on a small section of the market. All material subject to strictly enforced copyright laws. A Division of NBCUniversal. 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. Do you have your eyes on any team per se? 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. Address of QUALITY servIce and relIable guarding, We are constantly workIng and developng to mprove our qualIty of servce. This funds fees accelerate when its performance accelerates. Recent filings for HERCULES INVESTMENTS LLC 28 Jun 2019 SI-COMPLETE view 8 Jun 2019 REGISTRATION view Mutual Fund and ETF data provided by Refinitiv Lipper. PDF Case Plaintiff Defendant - United States Courts Early life James McDonald was born in Wellhead, Morayshire, in north Scotland on September 23 1840. This fund is for qualified investors only. Hercules Investments was founded by James McDonald, who previously was founder and CEO of Index Strategy Advisors. There are hundreds of companies in the small cap space that dont have the cash to pay their debt. In a parallel action, the United States Attorneys Office for the Central District of California announced criminal charges against McDonald. GESCO is a security company operating in various fields and basing on the principle of physical protection. 2023 RIA Intel, an Institutional Investor Publication. *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. How does it factor into your life? Buckhead Tower, Suite 400 3399 Peachtree Rd. Your email address will not be published. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. So, common sense would say, what changed in one year for a 50% premium in a market that most people would agree has been propelled with no monetary policy and stimulus? 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. This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. I played semi-pro football for 12 years. The PE has risen by about 50% from a year ago. 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. Im a football player disguised as a portfolio manager. (Jun 1986 - Sep 2016) 101 Royal Park Dr. Oakland Park, FL 33309. And even still, there is the risk of mutations, the continuation of sickness, hospitalizations, and fear will cause stagnation for the reopening concept. Unlike hedge funds, however, a mutual fund is accessible to individual investors and their advisors in a very transparent package. Registered in England and Wales. Then its fine. Legal Statement. 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. The Fund seeks to implement very short-term long and short positions in call and put options on the main US stock . Accounting and Auditing Enforcement Releases. Got a confidential news tip? Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American.
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