Local Financial Guru Ray Lucia Faces SEC Probe

Securities And Exchange Commission: Lucia's 'Buckets Of Money' Strategy Misled Investors

Previous versions of this story which included information from City News Service incorrectly implied that Ray Lucia faced allegations of fraud from the SEC. In fact, the SEC is not alleging fraud.

The Securities and Exchange Commission announced Wednesday that it has initiated administrative proceedings against longtime San Diego financial radio and television personality Ray Lucia for allegedly spreading misleading information to support his "Buckets of Money" investment strategy.

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"The SEC has made no, zero, allegations that any investor has been defrauded, has complained or lost a dime," Lucia read from a prepared statement hours after the SEC filed charges against him.

The SEC alleges Lucia informed prospective investors at seminars that his method was back-tested -- meaning that it was checked against historical financial data from past bear markets -- when little such research had actually been performed.

Lucia left 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 back-tests weren't really back-tests, and the strategy wasn't proven as they claimed," she said.

According to the SEC -- which named Lucia and his former company, Raymond J. Lucia Cos., in its filing -- Lucia told retirees that their nest eggs would grow and provide a hedge against inflation. However, the limited amount of research that was performed used historically low inflation rates and did not calculate advisory fees that clients would be charged, according to the agency.

The SEC contends that Lucia performed some calculations on his strategy in the late 1990s, with copies no longer available, and produced a pair of two-page spreadsheets.

"I intend to vigorously, vigorously defend this for myself, for our future relationships with people in my seminars and certainly for the entire financial planning industry," Lucia read from the statement approved by his lawyers.

10News contacted University of San Diego Economics Professor Alan Gin about the charges, which he called no big deal.

"Ray Lucia didn't steal money from people. He's not like Bernie Madoff," said Gin. "The claim is that he misled investors and gave them a false sense of security. What is uncertain is whether the investors actually succeeded or not."

Lucia's attorney, Michael Perlis, told 10News his client does not handle investments or recommend them to investors.

"All Ray does is promote a very successful retirement strategy called 'Buckets of Money,' and individuals who hear what he has to say, like what he has to say, are free to use the services of his son, Ray, Jr., are free to use their other brokerage or investment advisors , or free to simply to do it themselves," he said.

Both Perlis and Lucia said they do not know why the SEC is going after him.

"But I do know this, that they're wrong and they're going to lose," Perlis said.

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