MortgageReverse

SEC Charges Ray Lucia for Misleading Retired Investors

Radio personality and investment advisor Ray Lucia has been charged by the Securities and Exchange Commission for misleading retired investors through educational campaigns. While the charges are unrelated to his representation of Greenlight Financial’s reverse mortgage business, Greenlight has suspended the use of all marketing and advertising featuring Lucia until the allegations are resolved.

The SEC charges Lucia, a nationally syndicated radio personality and financial advice author, and his company formerly named Raymond J. Lucia Companies Inc. Tuesday for spreading misleading information about his “Buckets of Money” strategy at a series of investment seminars that he and his company hosted for potential clients, according to the SEC order.

The agency’s enforcement division alleges that Lucia claimed the strategy had been empirically “backtested” over bear market periods during seminars before retirees.

“Lucia and RJL left their seminar attendees with a false sense of comfort about the Buckets of Money strategy,” said Michele Wein Layne, Regional Director of the SEC’s Los Angeles Regional Office. “The so-called backtests weren’t really backtests, and the strategy wasn’t proven as they claimed.”

An attorney representing Lucia said his client expects to be vindicated and noted that there were no allegations that investors had lost money, the LA Times reported. Lucia made a statement in defense via his website this week, explaining the assumptions used in his presentation are widely accepted by large organizations including AARP. Additionally, he states the slides in question from his presentation were removed in 2010 upon the SEC’s initial audit of the presentation.

“The SEC does not allege that any potential investor was defrauded or that any investor complained, was harmed or incurred any portfolio loss,” he states.

Lucia has represented Irvine, Calif.-based Greenlight Reverse as a spokesman since August 2011, as a financial planner with a specialty in reverse mortgages.

Greenlight says the company is aware of the allegations and stresses that the charges are unrelated to Lucia’s role as a reverse mortgage spokesman.

“None of the charges made by the SEC are related to Ray Lucia’s endorsement role for Greenlight Financial Services, Inc. reverse mortgage products,” Justin Helwig, Greenlight vice president said in a statement emailed to RMD. “Greenlight requires all of its marketing partners to uphold the highest standards of ethics. Until these charges are resolved, Greenlight will suspend its reverse mortgage advertising featuring Ray Lucia and will re-examine it at an appropriate time. Furthermore, Greenlight’s reverse mortgage products are not affiliated or associated with any investment products or services offered by Mr. Lucia or any of his companies.”

Written by Elizabeth Ecker

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