Talk-show radio host and adviser Ray Lucia Sr. still fighting SEC bar in appeals court

Nearly three years after he was thrown out of the securities industry, the adviser has filed another appeal

Sep 26, 2016 @ 11:56 am

By Bruce Kelly

One thing you can say about Ray Lucia Sr., the former investment adviser and talk show radio host whom the SEC barred from the industry in 2013 — he doesn't give up easily.

In continuing a nearly three-year fight to reverse the Securities and Exchange Commission's decision, he filed a petition last week with the U.S. Court of Appeals for the D.C. Circuit to rehear his case.

Mr. Lucia in August lost his petition before the U.S. Court of Appeals to review and vacate the SEC decision. Last week, he filed the rehearing petition “en banc,” meaning that the entire 11-member bench of the appeals court could deny the review outright or eventually hear and vote on the case.

It's been a winding legal road for Mr. Lucia, who promoted a retirement strategy called “buckets of money.” In December 2013, an SEC administrative law judge punished Mr. Lucia for misleading investors about the efficacy of his “buckets of money” approach to building retirement assets. The SEC said Mr. Lucia used inflation rates to “back-test” the strategy that did not reflect historical rates of inflation for the time periods to which he referred.

At the time, Mr. Lucia was barred, and he and his firm were ordered to pay a total of $300,000 in fines.

Then, last fall, the SEC commissioners upheld the administrative judge's decision but split their vote along party lines. The two Republican commissioners dissented, saying that their three other colleagues, who supported the SEC judge's ruling, had “engaged in 'rulemaking by opinion.'”

Mr. Lucia's petition last week essentially argues that the precedent that the Court of Appeals based its decision on in August was incorrect, according to court documents.

“It is no mystery why the SEC chose to try this case, like so many others in recent years, in its captive court, before an adjudicator answerable to no one,” according to the petition. “Rehearing en banc should be granted.”

An attorney for Mr. Lucia declined to comment.

“This certainly sounds like an FA who is desperate to resurrect his career,” said Jeffrey Kaplan, a plaintiff's attorney who has also worked with advisers in compensation claims. “Without knowing the underlying facts and evidence, if what the SEC said was accurate, if there was misrepresentation of back testing, I don't know why he shouldn't be banned from the industry.”

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