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. Contact me online or call anytime at 844-689-5754. And so, if the market falls say 10%, our allocations will potentially offset the losses in the long only portfolio. That would be a doubling from the low. Market data provided by Factset. Hercules Investments' James McDonald explains the different risk-related techniques advisors can use to keep clients comfortable with their portfolios. Today, his ambition is to own a NFL team. 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. 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. Lets call it artificial income and artificial credit for small businesses that are keeping the economy alive. 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. James Arthur McDonald Jr., 50, was charged with one count of fraud for bilking clients out of millions of dollars on Sept. 21, 2022. To what extent do multiples deserve to be elevated given ultralow interest rates? And so, we had that crash and then the desire and the interest in moving back forward. 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. RIA Intel is part of the Euromoney Institutional Investor PLC group. The Hercules Fund aims to generate positive returns during times of rising and falling stock markets. 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 we know that this isnt how a strong economy operates. *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. All rights reserved. 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. It is a risk-hedged growth mutual fund that captures market appreciation and has the potential for great gains when markets fall. The Fund seeks to implement very short-term long and short positions in call and put options on the main US stock . 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. Top Hercules Investments Employees James McDonald Chief Executive Officer. Subscribe to RIA Intels thrice-weekly newsletter and follow the publication on Twitter and LinkedIn. 2023 RIA Intel, an Institutional Investor Publication. The fund is for qualified investors only, and as such mimics many of the features of a hedge fund strategy. Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox. The Hercules investment team features investment professionals averaging over 20+ years of experience . A CNBC spokesperson told USA TODAY the network no longer allowed McDonald on the air as soon it found out he was under investigation. Questions? A Division of NBCUniversal. Subscribe to RIA Intels thrice-weekly newsletter.]. The SEC filed a civil injunctive action against James Arthur McDonald, Jr. and Hercules Investments, LLC in relation to fraudulent securities offerings. 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,. 2023 FOX News Network, LLC. 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. I played semi-pro football for 12 years. Our strategies offer downside protection and even potential upside gains with protracted market downturns. Recent filings for HERCULES INVESTMENTS LLC 28 Jun 2019 SI-COMPLETE view 8 Jun 2019 REGISTRATION view We are able to provide uncorrelated growth, meaning our strategies do not depend on equity markets continuing to rise in order to accomplish gains. To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. 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. 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. I would be thrilled to buy the Washington football team because I grew up in Chevy Chase, Maryland. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. South Ozone Park, New York, United States View. 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. On 11/16/2021 HERCULES INVESTMENTS, LLC filed a Contract - Business lawsuit against DANNY MICHAEL CORRAL. Contact our office today to discuss your case. https://www.wealthmanagement.com/sites/wealthmanagement.com/files/logos/Wealth-Management-Logo-white.png. 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. Contact me online or call anytime at 844-689-5754 SEC Charges James Arthur McDonald, Jr. and His SEC-Registered Investment Adviser Firm, Hercules Investments, LLC with Offering Fraudulent Securities Sonn Law Staff Oct 05, 2022 Posted in Investment Loss Investigations # James Arthur McDonald Jr. 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. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Hercules Investments CEO/CIO James McDonald. "Robust, quant driven investment strategies are typically only available to Ultra High Net Worth individuals and families with $25 million or more to invest. 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? 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. 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. 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. Do you have your eyes on any team per se? Or before an SEC investigator. Hercules Investments was founded by James McDonald, who previously was founder and CEO of Index Strategy Advisors. 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.. GESCO is a security company operating in various fields and basing on the principle of physical protection. Web page addresses and e-mail addresses turn into links automatically. Get this delivered to your inbox, and more info about our products and services. 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. The Sonn Law Group is currently investigating allegations surrounding James Arthur McDonald, Jr. or Hercules Investments, LLC. The potential for growth is there, but the conditions for growth are not because we are artificially providing income. 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. The Judge overseeing this case is MARGARET MILLER BERNAL. This case was filed in Los Angeles County Superior Courts, Norwalk Courthouse located in Los Angeles, California. Please note: We are unable to take cases with losses of less than $50,000. Lets start with your macro view. This site contains attorney advertising. 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. All Rights Reserved. Lets wrap up with football. 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. Please read our Terms and Conditions, Modern Slavery Act Transparency Statement, and Privacy Policy before using the site. When typing in this field, a list of search results will appear and be automatically updated as you type. 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 so, equity market prices are assuming earnings that arent there. . Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. Wealth Management is part of the Informa Connect Division of Informa PLC. All rights reserved. Our employees and their family members enjoyed a wonderful time together this morning at PureTrack in Anaheim, CA! 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. To send us an e-mail, simply complete and submit the online form below. 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. Youre describing a giant disconnect between the markets and small businesses that are in a world of hurt. 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. "For nearly 100 years investment firms have sought to address the average investor's goals with simplistic and inefficient mutual funds, or expensive and highly inconsistent stock picking. 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. In a parallel action, the United States Attorney's Office for the Central District of California announced criminal charges against McDonald. I really enjoyed speaking with you and appreciate you taking the time. The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against McDonald and Hercules. More on that later. Its clock-striking-midnight dealmaking time at the Justice Department. Greg Bartalos (@gregorianchance) is editor of New York City-based RIA Intel. 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. With the Super Bowl around the corner, who do you want to win and who do you think will win? And what were seeing now is bull market enthusiasm and all types of signs of bubbles in asset prices. 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. This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. And follow the publication on Twitter and LinkedIn results will appear and be automatically updated as you...., if the market falls say 10 %, our allocations will potentially offset the losses in the fall layoffs. 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