Its not a doomsday picture, but markets are priced right now as if all economic engines are fully up and running. Hercules Investments has named Loreal McDonald as corporate counsel and interim chief operating officer. Our specialization in volatility is what sets us apart because there are many funds and strategies which offer potential gains in a declining market, but as passive indexes or passive strategy, they are bound to lose money when markets are flat or rising. 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. Legal Statement. It takes time to get back up, but we have had renewed waves of lockdowns in the fall and layoffs. The SEC filed a civil injunctive action against James Arthur McDonald, Jr. and Hercules Investments, LLC in relation to fraudulent securities offerings. McDonald graduated from Harvard University with a Bachelors degree in Economics. I would be thrilled to buy the Washington football team because I grew up in Chevy Chase, Maryland. When typing in this field, a list of search results will appear and be automatically updated as you type. One hundred million viewers are expected to tune into Sundays Super Bowl between the defending champion Kansas City Chiefs and Tampa Bay Buccaneers. My dream is to buy an NFL team. And what were seeing now is bull market enthusiasm and all types of signs of bubbles in asset prices. https://www.wealthmanagement.com/sites/wealthmanagement.com/files/logos/Wealth-Management-Logo-white.png. Its like a freight train that cant come to an exact halt without a crash. 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. 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. Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. Fox News Flash top headlines are here. Accounting and Auditing Enforcement Releases. 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,. Yes. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. And I think that that will trigger selling of portfolios that have had extensive gains, particularly in the past six months. from 8 AM - 9 PM ET. Hercules CEO, CNBC Pundit 'In Hiding' Amid Securities Fraud Charges James Arthur McDonald Jr. appears to be on the lam as he faces as much as 20 years in prison for allegedly defrauding. Hercules Investments was awarded the WealthManagement.com 2020 Alternative Asset Manager of the year. A frequent lecturer and conference speaker, he is a nationally-recognized expert on the topics of macroeconomics, event-driven investing, growth investing, portfolio construction, index investing, exchange-traded funds, digital currencies, and index . 165 Broadway 23rd Floor New York City NY, 10006 *by appointment only. Unless you are aiming for simultaneous knocks on the door from the FBI, SEC and CFTC. Tax Advantages Are a Selling Point for Investment in CRE. 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. 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. To what extent do multiples deserve to be elevated given ultralow interest rates? Below are the states with which the firm you selected makes its notice filings. Thats my personal mission. This material may not be published, broadcast, rewritten, James McDonald, CEO of Hercules Investments, is using equity index options to profit from an expected surge in volatility and market swings. Ryan Thomas Gosling (born November 12, 1980) is a Canadian actor. Sign up for free newsletters and get more CNBC delivered to your inbox. - Why volatility as an asset class is key for 2021, Its important for investors to be prepared for stock market volatility, as the economic outlook remains fragile in 2021, McDonald said. And even still, there is the risk of mutations, the continuation of sickness, hospitalizations, and fear will cause stagnation for the reopening concept. Covid-19 continues to spread rapidly and the vaccine rollout has been slower-than-expected, which is a worrisome combination for the economy and the stock market., The discussion will be streamed via Zoom at this link: https://us02web.zoom.us/webinar/register/WN_guvDkdmgQcy4-HcSuTnb1Q. 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. In a parallel action, the United States Attorney's Office for the Central District of California announced criminal charges against McDonald. Number 8860726. The SECs complaint alleges that McDonald raised over $3.6 million from investors between May 2019 and October 2021, which he told investors would be used to trade securities through an investment vehicle called the Index Strategy Advisors Fund. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Contact our office today to discuss your case. The PE has risen by about 50% from a year ago. 2023 Informa USA, Inc., All rights reserved, In this episode, David Armstrong, editor-in-chief at. The Sonn Law Group is currently investigating allegations surrounding James Arthur McDonald, Jr. or Hercules Investments, LLC. The SEC's complaint, which was filed in the Central District of California, charges McDonald and Hercules 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. This Book Changed My Life, Fifteen Must-Listen Business Podcasts for Advisors, Celebrity Estates: Jay Leno and Planning for Classic Car Collections. James McDonald, CEO and Chief Investment Officer of Hercules Investments, will serve as Portfolio Manager of the Hercules Fund. A conversation about economies, markets, wage inequality, Congress, crypto, and more. And, also, relatedly and with the prospect of decades in prison attach, conspiracy and fraud. scott@strategyvoiceassociates.com, Internet Explorer presents a security risk. He appeared as a financial expert on TV. By Greg Bartalos February 05, 2021 James McDonald (Courtesy photo) One hundred million viewers are expected to tune into Sunday's Super Bowl between the defending champion Kansas City Chiefs and Tampa . The fund is for qualified investors only, and as such mimics many of the features of a hedge fund strategy. 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. 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. Got a confidential news tip? 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? Volatility itself could be owned through a number of securities. 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. 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. And so, this is artificial. [USA Today]. In this virtual event, McDonald shares: - Why the markets are too optimistic about the Covid-19 vaccine And when we look at unemployment now, we say its recovered, but the recovery hasnt brought sufficient growth. Hercules Investments was founded by James McDonald, who previously was founder and CEO of Index Strategy Advisors. Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. How does it factor into your life? James Arthur McDonald Jr., 50, ran two Los Angeles-based investment firms called Hercules Investments and Index Strategy Advisors. 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. Unlike hedge funds, however, a mutual fund is accessible to individual investors and their advisors in a very transparent package. 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. More on that later. Lets call it artificial income and artificial credit for small businesses that are keeping the economy alive. (Jun 1986 - Sep 2016) 101 Royal Park Dr. Oakland Park, FL 33309. 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. But stimulating growth is impossible if the economy isnt open. The uncertainty around COVID-19 and risks of rising inflation were the impetus for launching the fund. What the Fed did was to protect the economy from going into the abyss. Do you have your eyes on any team per se? 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. We deliver these strategies through NFLHX. Scott Gamm The actual profits that have been generated and the guidance that has increased are based on a small section of the market. - The dangers of too much fiscal and monetary stimulus 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. When facing allegations such as these, its best not to be seen on TV. 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. All rights reserved. In a portfolio with a beta of one, one would enjoy virtually 100% downside protection with an allocation of 15% to the Hercules fund. No, Brent Kovars mother didnt have an artificial intelligence supercomputer in her basement, the SEC says. 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. And so, the gains that weve seen have come based on an enthusiasm and optimism placed across the entire market. Address of QUALITY servIce and relIable guarding, We are constantly workIng and developng to mprove our qualIty of servce. Our employees and their family members enjoyed a wonderful time together this morning at PureTrack in Anaheim, CA! Because bulls point to loads of liquidity, low rates, and solid earnings and guidance. Or, you know, anywhere, really. Whats your takeaway from GameStop, AMC, Blackberry, etc.? Small businesses are suffering tremendously, and theyre always going to be the engine of growth for the economy. With interest rates so low, what do you make of the TINA argument, which asserts there is no alternative to stocks? 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. WealthManagement.com Staff | Nov 05, 2020. And so, equity market prices are assuming earnings that arent there. It is a risk-hedged growth mutual fund that captures market appreciation and has the potential for great gains when markets fall. His demeanor was professional and pleasant and I would not hesitate to use him in future matters. I'm Jeff Sonn, an attorney concentrating on securities fraud and consumer class actions. He earned a bachelor's degree in economics from Harvard University. Any reference to past cases or successes made herein should not be construed as a guarantee of any future outcome. What should advisors know about your firm and how you can help them? Im going to play on my own team and practice. Our objective is to generate $10 billion for our clients in order for me to buy my football team. Do you still have a 15,000 target on the Dow? Our ability to monetize volatility is exceptional as evidenced by our winning WealthManagement.coms 2020 Wealthies Award as top Alternative Asset Manager. And so, if the market falls say 10%, our allocations will potentially offset the losses in the long only portfolio. Quant Research-Driven Investment Strategies For Investors Seeking Active Portfolio Management. Questions? I think we will retest the previous lows of last March before buying comes back in. Hercules' portfolios are designed to achieve aggressive gains whether markets are rising or falling. Are you suggesting that widespread economic weakness will eventually bubble up to drag down these indexes? 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,. Recent filings for HERCULES INVESTMENTS LLC 28 Jun 2019 SI-COMPLETE view 8 Jun 2019 REGISTRATION view All Rights Reserved. Resilience is the name of the game, says Mastercard CEO Michael Miebach, We've seen resilience in the U.S. consumer, says Coca-Cola CEO James Quincey, Illinois Governor JB Pritzker: Crime is coming down gradually in the city and it's getting better, Guggenheim CIO: We are predicting the recession to start mid-year, Moderna CEO: We're preparing our FDA filing for our RSV vaccine. And, now that you, the Justice Department and the SEC mention it, a lot of his stories sound a bit hard to believe. For more information, please see www.hercules-investments.com, Media Contact: Matt Yemma Peaks Strategies 909-633-9396 [emailprotected], Cision Distribution 888-776-0942 Furthermore, index options provide compelling risk/return profiles with substantially less risk and volatility than their stock option counterparts.". 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. "I spoke to Mr Sonn on a complex legal matter. I played semi-pro football for 12 years. 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. This field is for validation purposes and should be left unchanged. In 2005 he purchased the Houston Wolverines (the Texas Wolverines today), a semi-pro football team, and played for 13 years. 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. On securities fraud and consumer class actions not a doomsday picture, but we have had gains! 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