Hercules Investments was founded by James McDonald, who previously was founder and CEO of Index Strategy Advisors. What should advisors know about your firm and how you can help them? Of course, like most of the people brought on by CNBC to explain how the market will react to certain things (like talking heads on any subject on any 24-hour news channel), being generally right about those things was not a booking requirement. Arcadia Man Charged with Securities Fraud for Stealing Client Funds and Concealing His Investment Firms Massive Financial Losses. 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. from 8 AM - 9 PM ET. Its not a doomsday picture, but markets are priced right now as if all economic engines are fully up and running. This site contains attorney advertising. Recent filings for HERCULES INVESTMENTS LLC 28 Jun 2019 SI-COMPLETE view 8 Jun 2019 REGISTRATION view I'm Jeff Sonn, an attorney concentrating on securities fraud and consumer class actions. PDF Case Plaintiff Defendant - United States Courts Early life James McDonald was born in Wellhead, Morayshire, in north Scotland on September 23 1840. Mutual Fund and ETF data provided by Refinitiv Lipper. "There's a disconnect between Main Street and Wall Street, but we had to do it. Unless you are aiming for simultaneous knocks on the door from the FBI, SEC and CFTC. We had to save the economy from going off the cliff with us not being able to operate as normal," McDonald said. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. And so, this is artificial. McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. 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. Its two and 20 (fee arrangement) ensures that our portfolio management is in alignment with the profit objectives of the client. "-Sonn Law Group Client. Required fields are marked *. A conversation about economies, markets, wage inequality, Congress, crypto, and more. 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 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. 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. Employment levels have increased slightly, but we are artificially keeping our economy going with stimulus checks and obviously all of the Feds actions. Quant Research-Driven Investment Strategies For Investors Seeking Active Portfolio Management. 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. I think all the equity markets are so overstretched that when a risk element enters the market, the selling will be violent and accelerated. Quotes displayed in real-time or delayed by at least 15 minutes. or redistributed. The breadth of risk is extremely wide. He earned a bachelor's degree in economics from Harvard University. 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. And so, we had that crash and then the desire and the interest in moving back forward. The complaint also alleges that McDonald commingled the investor funds with Herculess assets and his personal assets, and used $440,000 of those funds for personal expenses, including to pay his personal credit card bills. Subscribe to RIA Intels thrice-weekly newsletter.]. Describe the ideal client profile. According to the. "I spoke to Mr Sonn on a complex legal matter. More on that later. Number 8860726. 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. And even still, there is the risk of mutations, the continuation of sickness, hospitalizations, and fear will cause stagnation for the reopening concept. The Hercules investment team features investment professionals averaging over 20+ years of experience . And while recognizing that each investors needs are distinct, on balance what percentage of a portfolio should this comprise? Its like a freight train that cant come to an exact halt without a crash. Yeah. This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. 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. // Disclaimer. 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. 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. 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? In a parallel action, the United States Attorney's Office for the Central District of California announced criminal charges against McDonald. Hercules' portfolios are designed to achieve aggressive gains whether markets are rising or falling. This funds fees accelerate when its performance accelerates. Actually, he didnt just assume it: He bet his clients money rather heavily on it, and lost them upwards of $40 million doing so. How does it factor into your life? To ensure the most secure and best overall experience on our website we recommend the latest versions of, Internet Explorer is no longer supported. 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. The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against McDonald and Hercules. Hercules Investments CEO/CIO James McDonald. In the S&P 500, you have mega cap tech Covid winners like Microsoft, Amazon, etc. It is a risk-hedged growth mutual fund that captures market appreciation and has the potential for great gains when markets fall. So, I think over 75% of the gains in the S&P 500 in 2020 could be attributed to a handful of names. And debt has spiraled over 50% higher to GDP than where we were last year this time. 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.. Its an all-weather strategy. - The dangers of too much fiscal and monetary stimulus Hercules Investments was founded by James McDonald, who previously was founder and CEO of Index Strategy Advisors. Today, his ambition is to own a NFL team. On 11/16/2021 HERCULES INVESTMENTS, LLC filed a Contract - Business lawsuit against DANNY MICHAEL CORRAL. 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 growth during up or down-market cycles. Our employees and their family members enjoyed a wonderful time together this morning at PureTrack in Anaheim, CA! If you or your loved one experienced investment losses, we are here to help. Top Hercules Investments Employees James McDonald Chief Executive Officer. Because bulls point to loads of liquidity, low rates, and solid earnings and guidance. Now he's wanted on fraud charges. Legal Statement. I played semi-pro football for 12 years. 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. [Like this article? Our strategies offer downside protection and even potential upside gains with protracted market downturns. The fund is for qualified investors only, and as such mimics many of the features of a hedge fund strategy. 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. 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 McDonald allegedly raised over $5 million and misappropriated funds for personal expenses and Ponzi-like payments. Whats your takeaway from GameStop, AMC, Blackberry, etc.? We deliver these strategies through NFLHX. 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. In a parallel action, the United States Attorneys Office for the Central District of California announced criminal charges against McDonald. No, Brent Kovars mother didnt have an artificial intelligence supercomputer in her basement, the SEC says. All material subject to strictly enforced copyright laws. 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. 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. Hercules Investments was awarded the WealthManagement.com 2020 Alternative Asset Manager of the year. "In our view, index options are a far more efficient and low- cost way to implement growth strategies for client portfolios compared with using funds or individual stocks. Legal Statement. He was direct and asked all the questions that were relevant and provided me with very thoughtful feedback and some useful contacts. Unlike hedge funds, however, a mutual fund is accessible to individual investors and their advisors in a very transparent package. Hercules Investments won a 2020 Wealthies Award for being the top Alternative Asset Manager. We fight to level the playing field between large corporations and the public investor. Greg Bartalos (@gregorianchance) is editor of New York City-based RIA Intel. 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. Now, there are a handful of companies that have flourished in the Covid era, but its a handful of companies. In 2005 he purchased the Houston Wolverines (the Texas Wolverines today), a semi-pro football team, and played for 13 years. All rights reserved. The attorneys at ChapmanAlbin are licensed to practice law in Ohio and Michigan. 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 United States Securities and Exchange Commission subpoenaed McDonald to testify before it in November 2021, but without advance notice he failed to appear as required. And so, the gains that weve seen have come based on an enthusiasm and optimism placed across the entire market. Check out what's clicking on Foxnews.com. Your email address will not be published. The Sonn Law Group is currently investigating allegations surrounding James Arthur McDonald, Jr. or Hercules Investments, LLC. This material may not be published, broadcast, rewritten, 2023 RIA Intel, an Institutional Investor Publication. The SEC filed a civil injunctive action against James Arthur McDonald, Jr. and Hercules Investments, LLC in relation to fraudulent securities offerings. Powered and implemented by FactSet Digital Solutions. The Fund seeks to implement very short-term long and short positions in call and put options on the main US stock . James McDonald, CEO of Hercules Investments, is using equity index options to profit from an expected surge in volatility and market swings. My dream was always to play in the NFL and thats going to be my ticket. Please note: We are unable to take cases with losses of less than $50,000. Get this delivered to your inbox, and more info about our products and services. And weve seen, recent examples of how the concentrated energy of small investors can make headlines. 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:
. Our objective is to generate $10 billion for our clients in order for me to buy my football team. Im going to play on my own team and practice. Market data provided by Factset. 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. Federal prosecutors charged McDonald with one count of. 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. Hercules applies quantitative research to design and actively manage portfolios for investors seeking maximum growth during up or down-market cycles. So, I got to root for Tom Brady because any 40-plus football player is one I admire. Arcadia Man Charged with Securities Fraud for Stealing Client Funds and Concealing His Investment Firms Massive Financial Losses [press release]He appeared as a financial expert on TV. And what were seeing now is bull market enthusiasm and all types of signs of bubbles in asset prices. Fox News Flash top headlines for September 22. James Arthur McDonald Jr., 50, ran two Los Angeles-based investment firms called Hercules Investments and Index Strategy Advisors. South Ozone Park, New York, United States View. 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. 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. CHICAGO JUDGE DENIES BAIL FOR ILLINOIS WOMAN WHO ALLEGEDLY PUSHED 3-YEAR-OLD NEPHEW INTO LAKE MICHIGAN. The bear case is that the effects of the shutdowns havent fully been realized yet. Accounting and Auditing Enforcement Releases. Subscribe to RIA Intels thrice-weekly newsletter and follow the publication on Twitter and LinkedIn. And when we look at unemployment now, we say its recovered, but the recovery hasnt brought sufficient growth. Please read our Terms and Conditions, Modern Slavery Act Transparency Statement, and Privacy Policy before using the site. Fox News Flash top headlines are here. For more information, please see www.hercules-investments.com, Media Contact: Matt Yemma Peaks Strategies 909-633-9396 [emailprotected], Cision Distribution 888-776-0942 Tune in to discover different ways that Hercules Investments can provide you with overlay strategies while giving you market volatility protection! 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. Hercules Investments' James McDonald explains the different risk-related techniques advisors can use to keep clients comfortable with their portfolios. Save my name, email, and website in this browser for the next time I comment. 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. (Fox News). Small businesses are suffering tremendously, and theyre always going to be the engine of growth for the economy. Lets wrap up with football. 2023 FOX News Network, LLC. I think we will retest the previous lows of last March before buying comes back in. 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