SEC alleges radio host misled investors


Written by Lily Leung
12:14 p.m., Sept. 5, 2012
Updated 3:03 p.m.






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A nationally syndicated radio host who has given financial advice on several TV outlets, including ABC News and Fox News, is at the center of a government investigation.

The Securities and Exchange Commission on Wednesday charged Rancho Santa Fe resident Ray Lucia Sr. with "spreading misleading information" through sessions that Lucia and his firm have held to draw clients to his own money-management strategy named "Buckets of Money."

Lucia told retirees that the idea, also touted in a book, "is a proven way to achieve both income and growth, while guarding against the ravages of inflation." But based on the SEC's findings, Lucia had "scant" support to back such claims.

Lucia -- a registered financial adviser and a widely quoted media source -- could not immediately be reached for comment. The U-T San Diego submitted interview requests through websites raylucia.com and rjlwm.com. The U-T also left a message at a number that's listed under the name of Raymond J. Lucia Sr.

Lucia told those who attended his seminars that the "Buckets of Money" strategy has been "backtested," which is a way to evaluate a financial theory. The SEC explains how it works: "Backtesting calculates how a strategy would have performed if it had actually been applied in the past. Thus, a backtest must utilize the actual data from the time in question in order to get an accurate result."

Investigators found that Lucia and his firm performed little to no backtesting. The SEC also states that Lucia admitted he used a lower inflation rate in the calculations to make the "Buckets of Money" results look better than they actually would have been.

Lucia markets himself on his website as "not your average financial adviser" and an "accomplished money man" with knowledge on everything from retirement planning to taxes.

Lucia was profiled in a 2005 article in San Diego Magazine in which he is quoted saying:
"San Diego has been called Scam Diego — mortgage company scams, promissory note scams, bartering scams. Financial planners must know their stuff. The radio show has been an incredible resource."
Lucia has appeared on several national TV and radio shows to share his knowledge on everything from mortgages on a local news station to the lottery on ABC News. He also shared his views on the stimulus on CNBC's "On the Money.".

His bio states that he entered the financial sector after teaching at a San Diego high school. He's listed as president and founder of Raymond J. Lucia Companies, Inc. in San Diego, which manages more than $500 million in assets, based on another profile on the website for ESPN 1700 AM. That station airs Lucia's nationally syndicated show.

ESPN 1700 has run "The Ray Lucia Show" for more than three years, said programming and operations manager Mike Shepard. Lucia's company RJL buys airtime from Broadcast Company of the Americas, which operates ESPN 1700, so "we exercise no editorial control over the content and appropriate disclaimers are aired during the program," Shepard added.

"At this time," Shepard says. "Since the SEC charges are alleged violations – our plan is to continue to air the show.

The SEC has ordered cease-and-desist proceedings to determine if there is any wrongdoing in the "Buckets of Money" case against Lucia. The government agency alleges Lucia made false statements in connection to the seminars and other literature related to the proprietary investment strategy.

Email me: lily.leung@utsandiego.com

SEC alleges radio host misled investors | UTSanDiego.com