Ray Lucia Fined and Banned (Anaheim: 2013, insurance, broker)

[happyinca]

U.S. SEC fines, bars 'Buckets of Money' radio host for fraud | Reuters

Seems pretty harsh...I mean compared to our Mayor...thoughts....

[hitman619]

You beat me to it!
He's the worst type of crook,defrauding old people

[happyinca]

Originally Posted by hitman619

You beat me to it!
He's the worst type of crook,defrauding old people

It says "no investors lost money" just that he was pushing them into REITS. So it is kind of confusing to me. Don't investment advisors push you into whatever they are selling???

I also posted this on the "Investor" forum. There are some smart people over there, way smarter than me so I will see what they have to say.

I am not defending Old Ray, there is probably more to the story, there always is.

[ycct]

Originally Posted by happyinca

Don't investment advisors push you into whatever they are selling???

Some investment advisors are subject to fiduciary standards and some are not, depending on various factors, like whether they are registered as advisors with a government authority, and what type of company they work for.

For example advisors working for a broker-dealer are usually not subject to fiduciary standards, only suitability standards. Basically, your broker can push any ****ty investment on you that makes them the most commission, as long as the general type of product they sell can be deemed suitable for your financial situation, even if better alternatives are known and available, and they do not have to disclose any conflicts of interests to you. Same goes for insurance product salesmen who often claim to be investment advisors as well while selling overpriced annuities and other insurance/investment products.

However if an advisor is subject to fiduciary standards, they are required by law to put the client interest above their own, and also disclose any conflicts of interest that might arise from their advice.

I am not really familiar with Ray Lucia, but from a quick google it appears that some of his companies were registered with the SEC as RIA (registered investment advisors) and therefore would by law be subject to the fiduciary standard, that the SEC claims he is violating. He also appears to be registered as a broker and an insurance salesmen with his other legal entities.

[happyinca]

Originally Posted by ycct

Some investment advisors are subject to fiduciary standards and some are not, depending on various factors, like whether they are registered as advisors with a government authority, and what type of company they work for.

For example advisors working for a broker-dealer are usually not subject to fiduciary standards, only suitability standards. Basically, your broker can push any ****ty investment on you that makes them the most commission, as long as the general type of product they sell can be deemed suitable for your financial situation, even if better alternatives are known and available, and they do not have to disclose any conflicts of interests to you. Same goes for insurance product salesmen who often claim to be investment advisors as well while selling overpriced annuities and other insurance/investment products.

However if an advisor is subject to fiduciary standards, they are required by law to put the client interest above their own, and also disclose any conflicts of interest that might arise from their advice.

I am not really familiar with Ray Lucia, but from a quick google it appears that some of his companies were registered with the SEC as RIA (registered investment advisors) and therefore would by law be subject to the fiduciary standard, that the SEC claims he is violating. He also appears to be registered as a broker and an insurance salesmen with his other legal entities.

Thank you. I listen to his show when I can on weekends. I do like him in general. I always thought he was obsessed with REITs though and REITs as an investment never made sense to me, too many fees and for a while they were really losing money. I think that is what got him in trouble, making promises about returns on REITs or implied returns without the proper backup.

[hitman619]

Originally Posted by happyinca

I think that is what got him in trouble, making promises about returns on REITs or implied returns without the proper backup.

Which is fraud right?

[1AngryTaxPayer]

Taking advice from this guy(or any TV/internet yahoo) is the equivalent of taking the advice of Mike Malloy or Rush. In summary, dumb. It's only a step above an infomercial.

[happyinca]

Originally Posted by hitman619

Which is fraud right?

Yes, and why he got into trouble.

[TristramShandy]

I wish they got him the hell off of 1700. If I want to listen to ESPN during the day, I have to battle through the static of an LA/Anaheim station. Who melds a sports talk station with that?

[earlyretirement]

The old adage typically holds true for investments. If it sounds too good to be true, it typically is.