The Securities and Exchange Commission today accused local San Diego radio talk show host and bestselling author Ray Lucia of misleading potential investors in regards to his investment strategy called “Buckets of Money.”
Seal of the U.S. Securities and Exchange Commission. (Photo credit: Wikipedia)
The SEC alleges that Lucia misled potential investors when he told them that his method had been “back-checked” using historical data from past bear markets and that the investors money would be safe and grow. According to the SEC, the investment program failed to account for fees and included artificially lowered inflation rates. When historically accurate rates of inflation were used, a 1973 investor would have run out of money by 1989, the SEC said, a far cry from the return claimed by Lucia.
The SEC said Lucia and his company “have admitted during the SEC’s investigation that the only testing that actually performed were some calculations that Lucia made in the 1990’s – copies of which no longer exist – and two two-page spreadsheets.” Lucia was aware that using the undervalued inflation rate would “make the results look more favorable for the Buckets of Money Strategy,” according to the SEC.
In addition to barring Lucia from making misleading claims, the SEC’s Order instituting Administrative and Cease-and-Desist Proceedings seeks financial penalties and “other remedial actions.”
Lucia quickly posted a passionate defense to the SEC allegations on his website on Wednesday afternoon, stressing that the investigation was a civil matter and not a criminal case and that it involved something he had not used in over two years. “I want to assure you that I intend to vigorously defend this absolutely meritless lawsuit and will seek an early trial,” said Lucia.
Despite the allegations, Lucia’s website is promoting a seminar to be held at The Hilton San Diego Resort & Spa on September 22nd, which will be co-hosted by actor and financial columnist Ben Stein, and former San Diego Mayor and current talk show host Roger Hedgecock.
Carlson Law Firm is reviewing potential claims against Ray Lucia and his affiliates. To speak with an attorney regarding your, please call Carlson Law Firm 619-544-9300 for a free consultation.
Tags: Ben Stein, financial advisor, financial advisor malpractice, financial advisors, Fraud Attorney, Investment Fraud, investment loss, investment recovery lawyer, Lucia, Ray Lucia, San Diego, SEC, Securities Fraud Attorney San Diego, stockbroker malpractice, Talk radio, U.S. Securities and Exchange Commission
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Mutual Funds 101
Mutual funds are sold by companies that pool money (capital) from many investors. This capital is then invested in bonds, stocks and/or other securities. Investors in the fund all have shares, and these shares represent a part of the fund’s holdings.
If you’re interested in making an investment, a mutual fund may or may not be the right choice for you. Like all investments, they come with many different levels of risk. They aren’t insured or guaranteed by financial institutions or government agencies, even those sold by banks. However, because mutual funds are often a mix of various bonds and/or stocks, the risk is some mutual funds is “spread out” or diversified. That said, some mutual funds are not diversified, and it is important to understand that a mutual fund investment can be very high risk, or very low risk, depending upon the holdings and the goals of the fund. Each fund must be looked at individually to determine if it is appropriate for the investor, in the same manner as any individual stock or other investment.
Mutual funds are managed by professional fund managers. These managers invest the money investors contribute into individual stocks, bonds and other securities. And because mutual funds buy and sell securities in large amounts at one time, they usually incur fewer fees, thus operating in a cost-efficient manner. However, it is very important to carefully examine prior to purchase all of the fees and costs associated with the fund you are purchasing as they can vary greatly and take a significant bite out of your return.
If you feel your financial advisor placed you in inappropriate mutual fund investments and/or failed to disclose the fees and costs associated with investment or that the underlying holdings of the fund were beyond your tolerance for risk, you may have a case. Call Carlson Law at 858-544-9300 for a free consultation.
Tags: bonds, Broker Fraud, capital, disclosure, diversification, Fiduciary Duty Breach, financial, financial loss, FINRA, Fraud Attorney, Investment, investment attorney, investment loss, Investor, investors, losses, mutual fund, mutual funds, Negligent Misrepresentation, San Diego, securities, Securities Fraud Attorney San Diego, securities lawsuit, Stock Loss, stocks, unsuitability, Unsuitable
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There are over 210 possible different credentials available to financial advisors. Very few of those credentials are regulated and some mean little or nothing. It is important for every investor to do their homework and really get to know their financial advisor, their credentials, licensing and experience. Simply because your advisor has many credentials or friends have recommended them is not enough.
While the CFP (Certified Financial Planner) and CFA (Certified Financial Advisor) designations require course work, exams and continuing education many certifications in the financial industry do not. So what should an investor do in order to select a financial advisor? There are a number of things that can be done.
- Everyone can go and look up the record of the advisor they are considering using on the Financial Industry Regulatory Authority’s BrokerCheck service. The BrokerCheck service will give you important information about the advisor you are considering; such as if that advisor has had prior complaints, been sued before, where he or she has worked in the past and for how long, the reason they left a prior employer, in addition to information about licensing and credentials.
- Next, look at the information from state securities regulators at the North American Securities Administrators Association.
- Also, review the National Association of Insurance Commissioners website regarding the advisor you are considering using.
A good question to ask a prospective advisor regarding their credentials is what percentage of people who apply for the credential obtain it? Also, feel free to ask about the qualifications of the instructors for the credential program touted. As an investor interviewing a financial advisor, you should be careful if the advisor is put off or unable to answer such simple questions.
If you have already fallen victim to an unqualified investment advisor and suspect an incidence of investment fraud, please call the Carlson Law Firm at (619) 544-9300 or contact a San Diego securities fraud attorney today.
Tags: Broker Fraud, California, Fiduciary Duty Breach, Financial Attorney, Fraud Attorney, Fraud Lawyer, Investment Fraud, Negligent Misrepresentation, San Diego, Securities Arbitration, Securities Attorney, Securities Fraud, Securities Law, Securities Lawyer, Securities Litigation, Security Lawyer, Stock Fraud, Stock Fraud Attorney, Stock Fraud Lawyer, Stock Loss
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