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. 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. We had to save the economy from going off the cliff with us not being able to operate as normal," McDonald said. Buckhead Tower, Suite 400 3399 Peachtree Rd. This fund is for qualified investors only. James McDonald, CEO of Hercules Investments, is using equity index options to profit from an expected surge in volatility and market swings. The uncertainty around COVID-19 and risks of rising inflation were the impetus for launching the fund. The breadth of risk is extremely wide. Having traded more than $10 billion worth of options in his 26-year career, McDonald says speculative excess is rampant, citing bitcoin, the SPAC boom, Reddit/GameStop, and elevated valuations. 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. Yeah. Are you suggesting that widespread economic weakness will eventually bubble up to drag down these indexes? It means that sentiment and greed can move a market in the face of asking for fundamental justification in the short term. In fairness to James McDonald, television is a much more welcoming venue than an SEC hearing room or courthouse. 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. Get James McDonald's email address (j*****@post.harvard.edu) and phone number (718848..) at RocketReach. Lines and paragraphs break automatically. 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. The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against McDonald and Hercules. On 11/16/2021 HERCULES INVESTMENTS, LLC filed a Contract - Business lawsuit against DANNY MICHAEL CORRAL. With the Super Bowl around the corner, who do you want to win and who do you think will win? Hercules Investments was awarded the WealthManagement.com 2020 Alternative Asset Manager of the year. 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. 2023 FOX News Network, LLC. https://www.wealthmanagement.com/sites/wealthmanagement.com/files/logos/Wealth-Management-Logo-white.png. 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? This funds fees accelerate when its performance accelerates. 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. Hercules Investments has named Loreal McDonald as corporate counsel and interim chief operating officer. 2023 RIA Intel, an Institutional Investor Publication. from 8 AM - 9 PM ET. 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. Volatility itself could be owned through a number of securities. PHILADELPHIA COP WHO SHOT UNARMED BLACK MOTORIST BEGINS TRIAL. We represent investors in claims against negligent brokers and brokerage firms. 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. 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.. 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. "-Sonn Law Group Client. 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. When typing in this field, a list of search results will appear and be automatically updated as you type. Please read our Terms and Conditions, Modern Slavery Act Transparency Statement, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws. 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 We want to hear from you. This field is for validation purposes and should be left unchanged. 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. Wealth Management is part of the Informa Connect Division of Informa PLC. 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. Registered in England and Wales. I think the phenomena is an anomaly like virtually every pocket of life were in right now. 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. 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. For more information, please visit: https://hercules-investments.com/hercules-public/index.html, Media Contact Each client and each clients case is unique, and no result or outcome is or can ever be guaranteed. 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. In a parallel action, the United States Attorney's Office for the Central District of California announced criminal charges against McDonald. $0 BAHAMAS 386 (SG458) - Alexander Graham Bell (pb10456) Stamps Caribbean Bahamas (1973-Now) So, I think over 75% of the gains in the S&P 500 in 2020 could be attributed to a handful of names. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. 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. Youre describing a giant disconnect between the markets and small businesses that are in a world of hurt. And so, the gains that weve seen have come based on an enthusiasm and optimism placed across the entire market. What should advisors know about your firm and how you can help them? 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 S&P 500 is trading at about 23 times projected forward earnings. 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. Its like a freight train that cant come to an exact halt without a crash. Hercules offers qualified clients market neutral portfolio management executed primarily through domestic index options. 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. Subscribe to RIA Intels thrice-weekly newsletter.]. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. 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. Your email address will not be published. But I think that the market will rebound and potentially finish the year slightly higher. He last appeared on the network in July 2021. And weve seen, recent examples of how the concentrated energy of small investors can make headlines. And while recognizing that each investors needs are distinct, on balance what percentage of a portfolio should this comprise? A conversation about economies, markets, wage inequality, Congress, crypto, and more. 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. 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." Below are the states with which the firm you selected makes its notice filings. 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. Got a confidential news tip? That would be a doubling from the low. 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. Charles Canter will lead the litigation. Tax Advantages Are a Selling Point for Investment in CRE. Absolutely. More on that later. 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. These filings are called "notice filings". Our employees and their family members enjoyed a wonderful time together this morning at PureTrack in Anaheim, CA! There are hundreds of companies in the small cap space that dont have the cash to pay their debt. Hercules Investments specializes in actively managed and systematic investment strategies to monetize investment performance from equity market volatility. Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. 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. The equity markets have behaved puzzlingly well in 2020 with the backdrop of a global pandemic and lots of uncertainty around the evolution of the coronavirus and its impact on small businesses, households, and way of life. My dream is to buy an NFL team. Powered and implemented by FactSet Digital Solutions. According to the. Legal Statement. 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. Market data provided by Factset. Tune in to discover different ways that Hercules Investments can provide you with overlay strategies while giving you market volatility protection! 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