In touting his “Buckets of Money” strategy at seminars, the SEC says that Lucia did not properly “backtest” his theory.

A San Diegan is very likely to go to the Supreme Court next year. He is Ray Lucia Sr., who has a syndicated investment-advice show on radio and a smaller presence on TV. In his heyday, exploiting his radio popularity, he would regularly give seminars to 100 to 500 persons wanting his advice on investing for retirement. He had a profitable investment company. He had written successful books on his investment prowess.

But in July of 2013, the Securities and Exchange Commission (SEC) banned him and his company from the securities industry. The agency charged that in touting his “Buckets of Money” strategy at seminars, he did not properly “backtest” his theory. For example, he used faulty inflation estimates and didn’t take investment fees into account when claiming the strategy would have worked in past markets, said the agency. One expert estimated that in following his “Buckets of Money” strategy, a retiree would actually wind up with a portfolio that was one-third the value of what he was telling audiences.

A radio expert says this boast is “bullshit.” Lucia is hawking his potential audience, not actual listeners.

He appealed the agency’s decision. One of his lawyers, Marc Fagel, says that the “SEC essentially questioned the clarity of a couple of slides in a PowerPoint deck used to describe a general retirement planning strategy. They never alleged that Ray sold a single security under false pretenses or that a single investor lost a penny with his firm.”

The securities agency, however, said, “Lucia’s misconduct was egregious…[he] owed fiduciary duties to his clients.” Also, his misconduct was “recurrent: he made the material misrepresentations and omissions in the slideshow at dozens of seminars every year.”

At the appeal hearing, Fagel said Lucia had lost his home, was living with his son, and had suffered “a serious medical setback.” Rob Butterfield, San Diego attorney and close friend of Lucia, told me then that Lucia had suffered a heart attack and left his home at the Crosby near Rancho Santa Fe to live with his son. Lucia was no longer giving $20,000 speeches or getting large consulting fees, said Butterfield, who also added that the bad publicity had turned off some advertisers, so the radio show was only roughly breaking even.

Lucia lost his appeal to the securities agency and then took the matter to the United States Court of Appeals for the District of Columbia. “This decision destroyed Ray’s career,” argued his lawyer in this appeal, Mark Perry. (He and Fagel are both with Gibson Dunn & Crutcher, a powerhouse firm with more than 1200 lawyers.)

However, even Lucia says his career has not been “destroyed,” as Perry claimed in May of this year. Lucia initially said he would give me an interview, but after consulting Gibson Dunn, he would only say by email, “My health is good, my media career with Biz Talk Radio and TV is doing well and my wife and I are really enjoying life in our semi-retired state, living in a house just a few minutes away from all of our kids and grandkids.”

But his radio show (his main gig) is not doing as well as he says. His website declares, “The Ray Lucia Show is broadcast to 40 million households in 65 cities.”

I consulted a top expert in radio. Just because the show is broadcast to 40 million households “doesn’t mean they are listening,” the expert harrumphs. “It’s so fake. It’s bullshit. It really annoys me.” He says, “Radio audiences are measured in listeners, not potential listeners,” and Lucia is boasting of potential listeners.

The Talkers.com website has an annual list of 100 top talk shows called the “Heavy Hundred.” Lucia is not among the top 100 in the 2016 list.

In his DC appeal, Lucia switched strategies. Instead of blasting the securities agency for kicking him out of the industry, he took a tack that had been a small part of his agency appeal. His argument was that the appointment of the administrative law judge who booted him out of the industry — and the appointment of other such agency judges — had been unconstitutional.

Under the Appointments Clause of the Constitution, principal officers must be appointed by the president and confirmed by the Senate and “inferior officers” must be appointed by the president, the heads of departments, or courts of law. The securities agency argued that “the great majority of government personnel are neither principal nor inferior officers, but rather ‘mere employees’ whose appointments are not restricted by the Appointments Clause.”

The administrative law judge who handled Lucia’s case was an employee of the agency, argued the agency. After all, the decisions by administrative law judges have to be approved by the agency’s top commissioners (as was the Lucia decision), said the securities agency.

Lucia’s lawyer Mark Perry argued that administrative law judges have significant authority and are not merely employees but inferior officers who should be appointed under the Appointments Clause. The DC appeals court ruled against him.

However, in December of last year, the Tenth Circuit in Denver ruled that those administrative law judges are inferior officers within the meaning of the Appointments Clause, and the manner by which they are installed by the bureaucracy violates that clause, said the Denver appellate panel.

Thus, there is a battle between the Washington DC appellate court and the Denver appellate court. The Supreme Court probably has to step in. Shortly after the DC court thumbed down Lucia’s argument, Gibson Dunn filed a petition asking the high court to review the decision.

Administrative law judges have “extensive authority,” including “the powers to oversee hearings and discovery, rule on motions…enter default judgments and impose or modify sanctions,” argued Gibson Dunn, claiming that around 90 percent of decisions by the securities agency’s administrative law judges are not reviewed by the agency’s commissioners.

“The court will decide whether to take the case sometime in October. It’s very likely the court will take it up,” says Perry.

The current Supreme Court is perhaps the most business-friendly court in history. It may be reluctant to rule in favor of an agency that regulates the financial industry. It’s possible Lucia may win one. If he does, say lawyers, it’s likely — but not a certainty — that he will be cleared to enter the investment business again.