San Diego radio host Ray Lucia Sr. has lost his appeal of the action by the Securities and Exchange Commission to ban him from the investment business. The appeal was heard August 6 by the full commission.
On September 3, the commission upheld the ban, finding that Lucia and his former company, Raymond J. Lucia Companies, "committed securities fraud by making material misrepresentations to prospective clients about their retirement wealth management strategy."
This week, the commission, by upholding the decision of an administrative law judge, banned Lucia from associating with an investment advisor, broker, or dealer; revoked his investment advisor registration; ordered him to cease and desist from further violations of securities laws; and ordered civil penalties of $250,000 against the firm and $50,000 against Lucia.
According to the securities agency, in touting his "Buckets of Money" strategy, Lucia told potential investors that the strategy had been backtested, indicating that it would have produced profits in prior periods of bad markets. But Lucia jiggled the numbers so that the backtests were misleading, said the agency.
"Actual backtests would have shown [the] model portfolio exhausting its assets before the end of the backtest periods rather than substantially increasing in value," said the agency on September 3 in its denial of his appeal. Lucia promoted the strategy at seminars and in two books.
As I reported last month, Lucia has sold his posh home near Rancho Santa Fe and is now living with his son.