Ray Lucia Defamation Threat
For more visit: A Professional’s View of Ray Lucia’s Non-Traded REITs
Investor and local radio talk show host Ray “Buckets of Money” Lucia has threatened to sue me for $300,000 for defamation over a blog post I wrote last month.
Robert K. Butterfield, a San Diego attorney, is outraged that I dared to besmirch the good name of Raymond J. Lucia, who dispenses financial wisdom on a daily radio show in several big media markets. This is after all the same man actor Ben Stein recently described in an opinion piece in The New York Times as a “stock guru.”
Attorney Butterfield insists that I must stop pointing out Lucia’s relationship to San Diego-based First Allied Securities, which recently agreed to pay nearly $2 million to settle U.S. Securities and Exchange Commission charges that it failed to supervise one of its employees.
He also demands that I never again repeat the blasphemy that fees for Lucia account run as high as 2 percent, paid quarterly in advance. (Lucia Defamation Threat Letter)
Your statement that Mr. Lucia’s company has never charged a management fee of 2% is completely false and another intentional malicious act. His company has never charged a management fee of over 1% even though they have the ability to charge up to 2% — but you did not bother to check this — did you?
Even though Lucia’s own SEC disclosure plainly states “The standard annual managed fees for RJL [Raymond J. Lucia] Adviser Directed accounts are 2 percent,” Attorney Butterfield has a point. Fees for one “wealth management” program pushed by Lucia actually run as high as 2.9 percent
That is an eye-popping number. It’s about half of the compound rate of return of the Dow Jones Industrial Average for the past 50 years. That fee is assessed on the entire value of whatever you invest with Lucia, even if he loses money. It makes me wonder whose wealth is really being “managed” here.
Ray Lucia's brokerage settles SEC charges
*** Update: An attorney for Ray Lucia has threatened to sue me over this blog post. See his letter and my response here. ***
First Allied Securities, a San Diego-based brokerage firm, has agreed to pay nearly $2 million to settle charges that it failed to supervise one of its employees.
The SEC found that between 2005 and 2008, former First Allied broker Harold Jaschke engaged in unauthorized and unsuitable trading on behalf of two Florida municipalities, putting them at risk of losing millions of dollars while he reaped commissions of more than $14 million for himself.
The SEC administrative order issued Friday hasn’t attracted much interest locally, but it’s worth a look because of its relationship with investor/radio host Ray “Buckets of Money” Lucia.
First Allied is owned by FAS Holdings, which is in turn owned by Chicago-based Advanced Equities Financial Corp. A 2008 story in Forbes magazine on Advanced Equities quoted an anonymous broker for the company as saying, “This place is a stereotypical bucket shop.”
Advanced Equities is also the subject of a series of complaints filed with financial industry regulators by San Diego’s Mirch Law Firm that mention Lucia, who hosts a radio and TV show in major media markets.
Lucia offers investment advice, including his trademarked “Buckets of Money” strategy through his show and at seminars, like this one in San Diego March 20 with actor Ben Stein.
According to SEC filings, Lucia solicits business for First Allied, and receives a cut of some of the fees in return. Fees for a Ray Lucia account run as high as 2 percent, paid quarterly in advance.
Buckets of money, indeed.