FINRA Broker Check: Raymond Joseph Lucia

Raymond Joseph Lucia – FINRA BrokerCheck Report from vernonhealy

• 1. BrokerCheck Report RAYMOND JOSEPH LUCIA CRD# 1073284 Report #23844-66066, data current as of Thursday, February 06, 2014. Section Title Page(s) Report Summary 1 Broker Qualifications 2-3 Registration and Employment History 4-5 Disclosure Events 6
• 2. About BrokerCheck® BrokerCheck offers information on all current-and many former-FINRA-registered securities brokers, and all current and former FINRA-registered securities firms. FINRA strongly encourages investors to use BrokerCheck to check the background of securities brokers and brokerage firms before deciding to conduct, or continue to conduct, business with them. · · · · · What is included in a BrokerCheck report? BrokerCheck reports for individual brokers include information such as employment history, professional qualifications, disciplinary actions, criminal convictions, civil judgments and arbitration awards. BrokerCheck reports for brokerage firms include information on a firm’s profile, history, and operations, as well as many of the same disclosure events mentioned above. Please note that the information contained in a BrokerCheck report may include pending actions or allegations that may be contested, unresolved or unproven. In the end, these actions or allegations may be resolved in favor of the broker or brokerage firm, or concluded through a negotiated settlement with no admission or finding of wrongdoing. Where did this information come from? The information contained in BrokerCheck comes from FINRA’s Central Registration Depository, or CRD® and is a combination of: o information FINRA and/or the Securities and Exchange Commission (SEC) require brokers and brokerage firms to submit as part of the registration and licensing process, and o information that regulators report regarding disciplinary actions or allegations against firms or brokers. How current is this information? Generally, active brokerage firms and brokers are required to update their professional and disciplinary information in CRD within 30 days. Under most circumstances, information reported by brokerage firms, brokers and regulators is available in BrokerCheck the next business day. What if I want to check the background of an investment adviser firm or investment adviser representative? To check the background of an investment adviser firm or representative, you can search for the firm or individual in BrokerCheck. If your search is successful, click on the link provided to view the available licensing and registration information in the SEC’s Investment Adviser Public Disclosure (IAPD) website at http://www.adviserinfo.sec.gov. In the alternative, you may search the IAPD website directly or contact your state securities regulator at http://www.nasaa.org. Are there other resources I can use to check the background of investment professionals? FINRA recommends that you learn as much as possible about an investment professional before deciding to work with them. Your state securities regulator can help you research brokers and investment adviser representatives doing business in your state. Thank you for using FINRA BrokerCheck. Using this site/information means that you accept the FINRA BrokerCheck Terms and Conditions. A complete list of Terms and Conditions can be found at brokercheck.finra.org For additional information about the contents of this report, please refer to the User Guidance or www.finra.org/brokercheck. It provides a glossary of terms and a list of frequently asked questions, as well as additional resources. For more information about FINRA, visit www.finra.org.
• 3. www.finra.org/brokercheck User Guidance RAYMOND J. LUCIA Report Summary for this Broker CRD# 1073284 This broker is not currently registered with FINRA. This report summary provides an overview of the broker’s professional background and conduct. Additional information can be found in the detailed report. Broker Qualifications This broker is not currently registered with FINRA. This broker has passed: Disclosure Events All individuals registered to sell securities or provide investment advice are required to disclose customer complaints and arbitrations, regulatory actions, employment terminations, bankruptcy filings, and criminal or civil judicial proceedings. 1 Principal/Supervisory Exam 1 General Industry/Product Exam Are there events disclosed about this broker? Yes 1 State Securities Law Exam Registration History This broker was previously registered with the following FINRA firm(s): The following types of disclosures have been reported: Type Count 1 Regulatory Event Customer Dispute LUCIA FINANCIAL LLC CRD# 37179 SAN DIEGO, CA 10/2006 – 06/2010 FIRST ALLIED SECURITIES, INC. CRD# 32444 SAN DIEGO, CA 11/2007 – 06/2010 SECURITIES AMERICA, INC. CRD# 10205 SAN DIEGO, CA 09/2002 – 11/2007 ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 12 Termination 1 Investment Adviser Representative Information The information below represents the individual’s record as a broker. For details on this individual’s record as an investment adviser representative, visit the SEC’s Investment Adviser Public Disclosure website at http://www.adviserinfo.sec.gov 1
• 4. www.finra.org/brokercheck User Guidance Broker Qualifications Registrations This section provides the self-regulatory organizations (SROs) and U.S. states/territories the broker is currently registered and licensed with, the category of each license, and the date on which it became effective. This section also provides, for every brokerage firm with which the broker is currently employed, the address of each branch where the broker works. This broker is not currently registered with FINRA. ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 2
• 5. www.finra.org/brokercheck User Guidance Broker Qualifications Industry Exams this Broker has Passed This section includes all securities industry exams that the broker has passed. Under limited circumstances, a broker may attain a registration after receiving an exam waiver based on exams the broker has passed and/or qualifying work experience. Any exam waivers that the broker has received are not included below. This individual has passed 1 principal/supervisory exam, 1 general industry/product exam, and 1 state securities law exam. Principal/Supervisory Exams Exam Category Date General Securities Principal Examination Series 24 04/08/1997 Exam Category Date General Securities Representative Examination Series 7 01/15/1983 Exam Category Date Uniform Securities Agent State Law Examination Series 63 05/23/2002 General Industry/Product Exams State Securities Law Exams Additional information about the above exams or other exams FINRA administers to brokers and other securities professionals can be found at www.finra.org/brokerqualifications/registeredrep/. ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 3
• 6. www.finra.org/brokercheck User Guidance Registration and Employment History Registration History The broker previously was registered with the following FINRA firms: Registration Dates Firm Name CRD# Branch Location 10/2006 – 06/2010 LUCIA FINANCIAL LLC 37179 SAN DIEGO, CA 11/2007 – 06/2010 FIRST ALLIED SECURITIES, INC. 32444 SAN DIEGO, CA 09/2002 – 11/2007 SECURITIES AMERICA, INC. 10205 SAN DIEGO, CA 01/2006 – 02/2006 HELIX TRADING LLC 37179 SAN DIEGO, CA 04/1996 – 09/2002 THE ADVISORS GROUP, INC. 14035 BETHESDA, MD 06/1994 – 05/1996 JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY 5181 BOSTON, MA 08/1991 – 05/1996 JOHN HANCOCK DISTRIBUTORS, INC. 468 BOSTON, MA 09/1992 – 07/1993 FIRST WALL STREET CORP. 13024 LA JOLLA, CA 01/1983 – 08/1991 PENN MUTUAL EQUITY SERVICES, INC. 4031 HORSHAM, PA Employment History Below is the broker’s employment history for up to the last 10 years. Please note that the broker is required to provide this information only while registered with FINRA and the information is not updated after the broker ceases to be registered. Therefore, an employment end date of “Present” may not reflect the broker’s current employment status. Employment Dates Employer Name Employer Location 12/2009 – Present RAYMOND J LUCIA ENTERPRISES SAN DIEGO, CA 10/1994 – Present RAYMOND J. LUCIA COMPANIES, INC SAN DIEGO, CA 08/1988 – Present RAYMOND J. LUCIA SAN DIEGO, CA 03/1997 – 12/2011 VANCE JACKSON LTD LAGUNA HILLS, CA 01/1993 – 12/2011 ROCKY HEMINGWAY HOUSE, LTD. AUSTIN, TX 01/1993 – 12/2011 ROCKY SPANISH KEYS I, LTD. AUSTIN, TX 10/1990 – 12/2011 CIMARRON VENTURES LTD / ROCKY MIDLAND LTD AUSTIN, TX 11/2007 – 06/2010 FIRST ALLIED SECURITIES, INC. SAN DIEGO, CA 12/2006 – 06/2010 LUCIA FINANCIAL, LLC SAN DIEGO, CA ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 4
• 7. www.finra.org/brokercheck User Guidance Registration and Employment History Employment History, continued Employment Dates Employer Name Employer Location 04/2004 – 02/2008 RJL FINANCIAL NETWORK, L.L.C. OMAHA, NE 09/2002 – 11/2007 SECURITIES AMERICA, INC SAN DIEGO, CA 10/2006 – 12/2006 HELIX TRADING, LLC SAN DIEGO, CA Other Business Activities This section includes information, if any, as provided by the broker regarding other business activities the broker is currently engaged in either as a proprietor, partner, officer, director, employee, trustee, agent or otherwise. This section does not include non-investment related activity that is exclusively charitable, civic, religious or fraternal and is recognized as tax exempt. 1)RADIO HOST; START:11/15/2007 2)LLK INSURANCE BROKERAGE SERVICES,LLC; LLC MEMBER; MARKETING; START DATE:4/1/09 3)RJL ENTERPRISES,INC; SOLE PROP; HOLDING CO OR SUB-S CORP; START:12/1/09 ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 5
• 8. www.finra.org/brokercheck User Guidance Disclosure Events What you should know about reported disclosure events: 1. All individuals registered to sell securities or provide investment advice are required to disclose customer complaints and arbitrations, regulatory actions, employment terminations, bankruptcy filings, and criminal or civil judicial proceedings. 2. Certain thresholds must be met before an event is reported to CRD, for example: o A law enforcement agency must file formal charges before a broker is required to disclose a particular criminal event. o A customer dispute must involve allegations that a broker engaged in activity that violates certain rules or conduct governing the industry and that the activity resulted in damages of at least $5,000. 3. Disclosure events in BrokerCheck reports come from different sources: o As mentioned at the beginning of this report, information contained in BrokerCheck comes from brokers, brokerage firms and regulators. When more than one of these sources reports information for the same disclosure event, all versions of the event will appear in the BrokerCheck report. The different versions will be separated by a solid line with the reporting source labeled. 4. There are different statuses and dispositions for disclosure events: o A disclosure event may have a status of pending, on appeal, or final. § A “pending” event involves allegations that have not been proven or formally adjudicated. § An event that is “on appeal” involves allegations that have been adjudicated but are currently being appealed. § A “final” event has been concluded and its resolution is not subject to change. o A final event generally has a disposition of adjudicated, settled or otherwise resolved. § An “adjudicated” matter includes a disposition by (1) a court of law in a criminal or civil matter, or (2) an administrative panel in an action brought by a regulator that is contested by the party charged with some alleged wrongdoing. § A “settled” matter generally involves an agreement by the parties to resolve the matter. Please note that brokers and brokerage firms may choose to settle customer disputes or regulatory matters for business or other reasons. § A “resolved” matter usually involves no payment to the customer and no finding of wrongdoing on the part of the individual broker. Such matters generally involve customer disputes. For your convenience, below is a matrix of the number and status of disclosure events involving this broker. Further information regarding these events can be found in the subsequent pages of this report. You also may wish to contact the broker to obtain further information regarding these events. Pending Regulatory Event ©2014 FINRA. All rights reserved. Final On Appeal 1 0 0 Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 6
• 9. www.finra.org/brokercheck Customer Dispute Termination ©2014 FINRA. All rights reserved. User Guidance 8 4 N/A N/A 1 N/A Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 7
• 10. www.finra.org/brokercheck User Guidance Disclosure Event Details When evaluating this information, please keep in mind that a discloure event may be pending or involve allegations that are contested and have not been resolved or proven. The matter may, in the end, be withdrawn, dismissed, resolved in favor of the broker, or concluded through a negotiated settlement for certain business reasons (e.g., to maintain customer relationships or to limit the litigation costs associated with disputing the allegations) with no admission or finding of wrongdoing. This report provides the information exactly as it was reported to CRD and therefore some of the specific data fields contained in the report may be blank if the information was not provided to CRD. Regulatory – Pending This type of disclosure event involves a pending formal proceeding initiated by a regulatory authority (e.g., a state securities agency, self-regulatory organization, federal regulatory agency such as the Securities and Exchange Commission, foreign financial regulatory body) for alleged violations of investment-related rules or regulations. Disclosure 1 of 1 Reporting Source: Regulator Regulatory Action Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Sanction(s) Sought: Cease and Desist Other: N/A Date Initiated: 09/05/2012 Docket/Case Number: 3-15006 Employing firm when activity occurred which led to the regulatory action: RAYMOND J. LUCIA COMPANIES, INC. Product Type: No Product Allegations: SEC ADMIN RELEASE 34-67781, IA RELEASE 3456, INVESTMENT COMPANY ACT RELEASE 40-30193, SEPTEMBER 5, 2012: THE SECURITIES AND EXCHANGE COMMISSION (“COMMISSION”) DEEMED IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTED PURSUANT TO SECTION 15(B) OF THE SECURITIES EXCHANGE ACT OF 1934 (“EXCHANGE ACT”), SECTIONS 203(E), 203(F) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940 (“ADVISERS ACT”), AND SECTION 9(B) OF THE INVESTMENT COMPANY ACT OF 1940 (“INVESTMENT COMPANY ACT”), AGAINST RAYMOND J. LUCIA, SR. (“LUCIA”). ©2014 FINRA. All rights reserved. THE DIVISION OF ENFORCEMENT ALLEGED THAT: LUCIA’S FIRM WAS REGISTERED WITH THE COMMISSION AS AN INVESTMENT ADVISER FROM Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 8
• 11. www.finra.org/brokercheck User Guidance THE DIVISION OF ENFORCEMENT ALLEGED THAT: LUCIA’S FIRM WAS REGISTERED WITH THE COMMISSION AS AN INVESTMENT ADVISER FROM SEPTEMBER 2002 THROUGH DECEMBER 2011. IN MAY 2010, THE FIRM SOLD ITS BUSINESS AND TRANSFERRED ITS CLIENT ACCOUNTS TO ANOTHER INVESTMENT ADVISER REGISTERED WITH THE COMMISSION. LUCIA CURRENTLY IS A REGISTERED INVESTMENT ADVISER REPRESENTATIVE AT THE OTHER INVESTMENT ADVISER. ON HIS RADIO SHOW AND WEBSITE, AT SEMINARS, AND IN HIS BOOKS, LUCIA DISCUSSES HIS PROPRIETARY WEALTH MANAGEMENT STRATEGY, WHICH HE CALLS “BUCKETS OF MONEY” (“BOM”). A RECURRING THEME IS THAT THE BOM STRATEGY WILL ENHANCE ONE’S ABILITY TO RETIRE IN COMFORT AND SAFETY, PROTECT THE MONEY ONE HAS SPENT A LIFETIME ACCUMULATING, AND GENERATE INFLATION-ADJUSTED INCOME FOR LIFE. TO SUPPORT THEIR CLAIMS ABOUT THE BOM STRATEGY, RESPONDENTS CLAIMED TO HAVE EXTENSIVELY “BACKTESTED” IT. DESPITE THE CLAIMS THEY MADE TO THE PUBLIC, THE RESPONDENTS PERFORMED SCANT, IF ANY, BACKTESTING OF THE BOM STRATEGY. RESPONDENTS HELD NUMEROUS SEMINARS PROMOTING THEIR BOM STRATEGY IN AN EFFORT TO OBTAIN ADVISORY CLIENTS WHO WOULD BE CHARGED FEES IN RETURN FOR RESPONDENTS’ ADVISORY SERVICES. RESPONDENTS PROMOTED THE BOM STRATEGY BY USING A LENGTHY SIDESHOW AT THE SEMINAR PRESENTATIONS, AFTER PROMOTING THOSE SEMINAR PRESENTATIONS ON LUCIA’S RADIO SHOW AND WEBSITES. SPREADSHEETS PURPORTEDLY VALIDATED THE SLIDESHOW’S CENTRAL PREMISE-THAT THE BOM STRATEGY WOULD HAVE PROVIDED SUPERIOR OUTCOMES ACROSS HISTORICAL TIME PERIODS THAN OTHER INVESTMENT STRATEGIES, AND IS A SUPERIOR INVESTMENT STRATEGY GOING FORWARD. IT WAS MATERIALLY MISLEADING FOR RESPONDENTS TO CLAIM THAT THEIR ALLEGED BACKTESTING VALIDATED THE BOM STRATEGY. AMONG OTHER REASONS, RESPONDENTS DO NOT APPEAR TO HAVE ENGAGED IN THE “NUMEROUS” BACKTESTS AND DO NOT APPEAR TO HAVE “PROVEN” THAT THE BOM INVESTMENT STRATEGY WORKS. ©2014 FINRA. All rights reserved. WHILE ACKNOWLEDGING THE IMPORTANCE OF FEES, RESPONDENTS DID NOT DISCLOSE TO INVESTORS THAT THEIR BACKTESTING, WHICH IS PURPORTEDLY VALIDATED BY THE SPREADSHEETS, DID NOT INCLUDE ADVISORY FEES. IN THE CALCULATIONS FOR THE SPREADSHEETS, RESPONDENTS FAILED TO REALLOCATE ASSETS AFTER THE BOND AND REIT BUCKETS WERE EXHAUSTED. AS A RESULT, A SUBSTANTIAL Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. PORTION OF THE HYPOTHETICAL PORTFOLIO WAS FULLY INVESTED IN 9
• 12. www.finra.org/brokercheck User Guidance REIT BUCKETS WERE EXHAUSTED. AS A RESULT, A SUBSTANTIAL PORTION OF THE HYPOTHETICAL PORTFOLIO WAS FULLY INVESTED IN THE STOCK MARKET. THIS RESULTED IN OVERSTATING THE PERFORMANCE OF THE BOM STRATEGY, AND MATERIALLY MISREPRESENTED THE RESULTS THAT COULD BE EXPECTED FROM THE BOM STRATEGY. AT ITS SEMINARS, THE FIRM PRESENTED PERFORMANCE CALCULATIONS FOR SEVERAL DIFFERENT ALLOCATION STRATEGIES WHICH PURPORT TO DEMONSTRATE THE SUPERIOR PERFORMANCE OF THE BOM STRATEGY OVER CERTAIN TIME PERIODS. THE ONLY DOCUMENTATION OF THOSE CALCULATIONS WHICH THE FIRM RETAINED, HOWEVER, CONSISTS OF TWO TWO-PAGE EXCEL SPREADSHEETS WHICH FAIL TO DUPLICATE THE ADVERTISED INVESTMENT STRATEGY. THE CALCULATIONS FAIL TO PROVIDE FOR THE REALLOCATION OF ASSETS THAT IS ONE OF THE HALLMARKS OF THE BOM STRATEGY. AS A RESULT OF THE CONDUCT, LUCIA WILLFULLY AIDED AND ABETTED AND CAUSED THE FIRM’S VIOLATIONS OF SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1(A)(5) PROMULGATED THEREUNDER; AND LUCIA WILLFULLY AIDED AND ABETTED AND CAUSED THE FIRM’S VIOLATIONS OF SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1(A)(5) PROMULGATED THEREUNDER. Current Status: Pending Summary: SEC INITIAL DECISION RELEASE 495, JULY 8, 2013: IT IS ORDERED THAT, PURSUANT TO SECTION 203(E) OF THE ADVISERS ACT, THE REGISTRATION OF LUCIA AS AN INVESTMENT ADVISER IS REVOKED. LUCIA IS PERMANENTLY BARRED FROM ASSOCIATION WITH INVESTMENT ADVISERS, BROKERS, OR DEALERS. LUCIA SHALL CEASE AND DESIST FROM AIDING AND ABETTING OR CAUSING THE COMMISSION OF, ANY VIOLATIONS OR FUTURE VIOLATIONS OF SECTIONS 206(1), 206(2), AND 206(4) OF THE ADVISERS ACT AND SHALL PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $50,000. PAYMENT OF PENALTIES, DISGORGEMENT, PLUS INTEREST, SHALL BE MADE ON THE FIRST DAY FOLLOWING THE DAY THE INITIAL DECISION BECOMES FINAL. ©2014 FINRA. All rights reserved. SEC INITIAL DECISION RELEASE 540, DECEMBER 6, 2013: THE INITIAL DECISION ON REMAND SUPPLEMENTS THE JULY 8, 2013, INITIAL DECISION IN THE PROCEEDING, CONFIRMS THAT THE FIRM VIOLATED SECTIONS 206(1), 206(2), AND 206(4) OF THE INVESTMENT ADVISERS ACT OF 1940 (ADVISERS ACT) BY MISREPRESENTING THE VALIDITY OF PURPORTED BACKTESTING IN SEMINARS FOR PROSPECTIVE INVESTORS, AND THAT LUCIA AIDED AND ABETTED THE FIRM’S VIOLATIONS OF SECTIONS 206(1), 206(2), AND 206(4) OF THE ADVISERS ACT, AND BARS LUCIA FROM ASSOCIATING WITH AN Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. INVESTMENT ADVISER, BROKER, OR DEALER, REVOKES LUCIA’S 10
• 13. www.finra.org/brokercheck User Guidance OF THE ADVISERS ACT, AND BARS LUCIA FROM ASSOCIATING WITH AN INVESTMENT ADVISER, BROKER, OR DEALER, REVOKES LUCIA’S INVESTMENT ADVISER REGISTRATION, IMPOSES A CIVIL PENALTY OF $50,000 ON LUCIA AND ORDERS LUCIA TO CEASE AND DESIST FROM FURTHER VIOLATIONS OF THE ADVISERS ACT. THE ALJ FOUND THAT RESPONDENTS DID NOT VIOLATE SECTIONS 204 OR RULES 204-2(A)(16) AND 206(4)-1(A)(5) THEREUNDER. IN THE JULY 8, 2013 INITIAL DECISION THE ADMINISTRATIVE LAW JUDGE (“ALJ”) FOUND THAT LUCIA AIDED AND ABETTED THE FIRM’S VIOLATIONS OF, SECTIONS 206(1), 206(2), AND 206(4) OF THE ADVISERS ACT BY FRAUDULENT MISREPRESENTATIONS CONCERNING AN INVESTMENT STRATEGY INVOLVING REAL ESTATE INVESTMENT TRUST (REIT) SECURITIES. THE COMMISSION HAD ALLEGED THREE OTHER MISREPRESENTATIONS IN THE ORDER INSTITUTING PROCEEDINGS (“OIP”), NAMELY, THE USE OF A MISLEADING INFLATION RATE, FAILURE TO DEDUCT FEES OR DISCLOSE THAT THE BACKTESTS WERE NOT NET OF FEES, AND FAILURE TO REALLOCATE ASSETS IN ACCORDANCE WITH THE STRATEGY PRESENTED, WITHOUT DISCLOSING THAT FAILURE. THE ALJ FOUND IN THE JULY 8, 2013 INITIAL DECISION THAT THESE ADDITIONAL MISREPRESENTATIONS, EVEN IF TRUE, WOULD NOT HAVE RESULTED IN DIFFERENT SANCTIONS THAN THOSE IMPOSED FOR MISREPRESENTATIONS REGARDING REITS. ACCORDINGLY, THE ALJ DECLINED TO ANALYZE THE THREE OTHER MISREPRESENTATIONS ALLEGED IN THE OIP. ON AUGUST 8, 2013, THE COMMISSION, ON ITS OWN INITIATIVE, REMANDED THE CASE FOR FINDINGS AS TO THE THREE ADDITIONAL ALLEGED MISREPRESENTATIONS. THE INITIAL DECISION SHALL BECOME EFFECTIVE IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF RULE 360 OF THE COMMISSION’S RULES OF PRACTICE, 17 C.F.R. § 201.360. THE INITIAL DECISION WILL NOT BECOME FINAL UNTIL THE COMMISSION ENTERS AN ORDER OF FINALITY. THE COMMISSION WILL ENTER AN ORDER OF FINALITY UNLESS A PARTY FILES A PETITION FOR REVIEW OR MOTION TO CORRECT MANIFEST ERROR OF FACT OR THE COMMISSION DETERMINES ON ITS OWN INITIATIVE TO REVIEW THE INITIAL DECISION AS TO A PARTY. IF ANY OF THESE EVENTS OCCUR, THE INITIAL DECISION SHALL NOT BECOME FINAL AS TO THAT PARTY. i Reporting Source: ©2014 FINRA. All rights reserved. Firm Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 11
• 14. www.finra.org/brokercheck User Guidance Regulatory Action Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Sanction(s) Sought: Cease and Desist Date Initiated: 09/05/2012 Docket/Case Number: 3-15006 Employing firm when activity occurred which led to the regulatory action: RAYMOND J LUCIA COMPANIES, INC. Product Type: No Product Allegations: RAYMOND J LUCIA COMPANIES, INC. (“RJLC”) VIOLATED SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1(A)(5) PROMULGATED THEREUNDER; LUCIA AIDED AND ABETTED AND CAUSED RJLC’S VIOLATIONS OF SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1(A)(5) PROMULGATED THEREUNDER; LUCIA AIDED AND ABETTED AND CAUSED RJLC’S VIOLATIONS OF SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1(A)(5) PROMULGATED THEREUNDER; AND RJLC VIOLATED SECTION 204 OF THE ADVISERS ACT AND RULE 204-2(A)(16) PROMULGATED THEREUNDER. Current Status: Pending Summary: ©2014 FINRA. All rights reserved. SEC INITIAL DECISION RELEASE 495, JULY 8, 2013: IT IS ORDERED THAT, PURSUANT TO SECTION 203(E) OF THE ADVISERS ACT, THE REGISTRATION OF LUCIA AS AN INVESTMENT ADVISER IS REVOKED. LUCIA IS PERMANENTLY BARRED FROM ASSOCIATION WITH INVESTMENT ADVISERS, BROKERS, OR DEALERS. LUCIA SHALL CEASE AND DESIST FROM AIDING AND ABETTING OR CAUSING THE COMMISSION OF, ANY VIOLATIONS OR FUTURE VIOLATIONS OF SECTIONS 206(1), 206(2), AND 206(4) OF THE ADVISERS ACT AND SHALL PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $50,000. PAYMENT OF PENALTIES, DISGORGEMENT, PLUS INTEREST, SHALL BE MADE ON THE FIRST DAY FOLLOWING THE DAY THE INITIAL DECISION BECOMES FINAL. THE INITIAL DECISION SHALL BECOME EFFECTIVE IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF RULE 360 OF THE COMMISSION’S RULES OF PRACTICE, 17 C.F.R. § 201.360. PURSUANT TO THAT RULE, MR. LUCIA MAY FILE A PETITION FOR REVIEW OF THIS INITIAL DECISION WITHIN TWENTY-ONE DAYS AFTER SERVICE OF THE INITIAL DECISION. MR. LUCIA MAY ALSO FILE A MOTION TO CORRECT A MANIFEST ERROR OF FACT WITHIN TEN DAYS OF THE INITIAL DECISION, PURSUANT TO RULE 111 OF THE COMMISSION’S RULES OF PRACTICE, 17 C.F.R. § 201.111. IF A MOTION TO CORRECT A MANIFEST ERROR OF FACT IS FILED BY MR. LUCIA, THEN HE WILL HAVE 21 DAYS TO Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. FILE A PETITION FOR REVIEW FROM THE DATE OF THE ORDER 12
• 15. www.finra.org/brokercheck User Guidance OF PRACTICE, 17 C.F.R. § 201.111. IF A MOTION TO CORRECT A MANIFEST ERROR OF FACT IS FILED BY MR. LUCIA, THEN HE WILL HAVE 21 DAYS TO FILE A PETITION FOR REVIEW FROM THE DATE OF THE ORDER RESOLVING THE MOTION TO CORRECT MANIFEST ERROR OF FACT. THE INITIAL DECISION WILL NOT BECOME FINAL UNTIL THE COMMISSION ENTERS AN ORDER OF FINALITY. THE COMMISSION WILL ENTER AN ORDER OF FINALITY UNLESS MR. LUCIA FILES A PETITION FOR REVIEW OR MOTION TO CORRECT MANIFEST ERROR OF FACT OR THE SEC DETERMINES ON ITS OWN INITIATIVE TO REVIEW THE DECISION. IT SHOULD BE NOTED THAT THERE IS NO ALLEGATION OR FINDING IN THE INITIAL DECISION THAT ANY INVESTOR ACCOUNT WAS MISHANDLED IN ANY WAY, OR THAT ANY INVESTOR SUFFERED ANY MONETARY LOSS AS A RESULT OF THE VIOLATIONS. PRIOR TO THE INTIAL ORDER BEING ENTERED, THERE WERE NO CUSTOMER COMPLAINTS RELATED TO THE POWERPOINT PRESENTATION WHICH WAS THE SUBJECT OF THE ALLEGATIONS. i Reporting Source: Broker Regulatory Action Initiated By: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Sanction(s) Sought: Cease and Desist Civil and Administrative Penalty(ies)/Fine(s) Date Initiated: 09/05/2012 Docket/Case Number: 3-15006 Employing firm when activity occurred which led to the regulatory action: RAYMOND J LUCIA COMPANIES, INC. Product Type: No Product Allegations: ©2014 FINRA. All rights reserved. SEC ADMIN RELEASE 34-67781, IA RELEASE 3456, INVESTMENT COMPANY ACT OF 1940 RELEASE 30193,SEPTEMBER 5, 2012: THE SECURITIES AND EXCHANGE COMMISSION (“COMMISSION”) DEEMED IT APPROPRIATE AND IN THE PUBLIC INTEREST THAT PUBLIC ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS BE INSTITUTED PURSUANT TO SECTION 15(B) OF THE SECURITIES EXCHANGE ACT OF 1934 (“EXCHANGE ACT”), SECTIONS 203(E), 203(F) AND 203(K) OF THE INVESTMENT ADVISERS ACT OF 1940 (“ADVISERS ACT”), AND SECTION 9(B) OF THE INVESTMENT COMPANY ACT OF 1940 (“INVESTMENT COMPANY ACT”), AGAINST RAYMOND J. LUCIA, SR., AND HIS FORMER INVESTMENT ADVISER FIRM (COLLECTIVELY, Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. “RESPONDENTS”). THE DIVISION OF ENFORCEMENT ALLEGES THAT: THE FIRM IS A CALIFORNIA CORPORATION LOCATED IN 13
• 16. www.finra.org/brokercheck ©2014 FINRA. All rights reserved. User Guidance INVESTMENT ADVISER FIRM (COLLECTIVELY, “RESPONDENTS”). THE DIVISION OF ENFORCEMENT ALLEGES THAT: THE FIRM IS A CALIFORNIA CORPORATION LOCATED IN SAN DIEGO, CALIFORNIA. THE FIRM WAS REGISTERED WITH THE COMMISSION AS AN INVESTMENT ADVISER FROM SEPTEMBER 2002 THROUGH DECEMBER 2011. IN MAY 2010, THE FIRM SOLD ITS BUSINESS AND TRANSFERRED ITS CLIENT ACCOUNTS TO ANOTHER INVESTMENT ADVISER, WHICH IS REGISTERED WITH THE COMMISSION. LUCIA CURRENTLY IS A REGISTERED INVESTMENT ADVISER REPRESENTATIVE AT THE OTHER INVESTMENT ADVISER. SINCE 1991, LUCIA HAS HOSTED A DAILY RADIO SHOW WHICH WAS NATIONALLY SYNDICATED IN 2000 AND IS NOW SIMULTANEOUSLY PODCAST. LUCIA ALSO APPEARS FREQUENTLY AS A COMMENTATOR ON A VARIETY OF TELEVISION PROGRAMS AND IS FEATURED ON TWO WEBSITES. IN ADDITION, LUCIA WAS THE FEATURED SPEAKER AT REGULAR SEMINARS HOSTED BY THE FIRM ACROSS THE COUNTRY. THESE SEMINARS WERE PROMOTED ON LUCIA’S RADIO SHOW AND WEBSITE. IN ADDITION, LUCIA HAS WRITTEN THREE BOOKS ON INVESTING FOR RETIREMENT: BUCKETS OF MONEY: HOW TO RETIRE IN COMFORT AND SAFETY (2004), READY? SET? RETIRE! (2007), AND THE BUCKETS OF MONEY RETIREMENT SOLUTION: THE ULTIMATE GUIDE TO INCOME FOR LIFE (2010). ON HIS RADIO SHOW AND WEBSITE, AT SEMINARS, AND IN HIS BOOKS, LUCIA DISCUSSES HIS PROPRIETARY WEALTH MANAGEMENT STRATEGY, WHICH HE CALLS “BUCKETS OF MONEY” (“BOM”). LUCIA’S COMMENTS ARE NOT LIMITED TO DISCUSSIONS OF THE BOM STRATEGY, BUT A RECURRING THEME IS THAT THE BOM STRATEGY WILL ENHANCE ONE’S ABILITY TO RETIRE IN COMFORT AND SAFETY, PROTECT THE MONEY ONE HAS SPENT A LIFETIME ACCUMULATING, AND GENERATE INFLATION-ADJUSTED INCOME FOR LIFE. TO SUPPORT THEIR CLAIMS ABOUT THE BOM STRATEGY, RESPONDENTS CLAIMED TO HAVE EXTENSIVELY “BACKTESTED” IT. BACKTESTING IS GENERALLY UNDERSTOOD AS THE PROCESS OF EVALUATING A STRATEGY, THEORY, OR MODEL BY APPLYING IT TO HISTORICAL DATA. 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. DESPITE THE CLAIMS THEY MADE TO THE PUBLIC, THE RESPONDENTS PERFORMED SCANT, IF ANY, BACKTESTING OF THE BOM STRATEGY. RESPONDENTS HAVE ADMITTED THAT THE ONLY TESTING THEY PERFORMED INVOLVED: (1) SOME CALCULATIONS LUCIA PERFORMED MANUALLY IN THE LATE 1990S, Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. COPIES OF WHICH NO LONGER EXIST; (2) A SO-CALLED 14
• 17. www.finra.org/brokercheck User Guidance CALCULATIONS LUCIA PERFORMED MANUALLY IN THE LATE 1990S, COPIES OF WHICH NO LONGER EXIST; (2) A SO-CALLED “BACKTEST” FOR THE PERIOD FROM 1966 TO 2003, MEMORIALIZED ON A TWO PAGE EXCEL SPREADSHEET, WHICH WAS PERFORMED BY A FIRM EMPLOYEE IN 2003 (THE “1966 SPREADSHEET”); AND (3) A SO-CALLED “BACKTEST” FOR THE PERIOD FROM 1973 TO 2003, MEMORIALIZED ON A TWO PAGE EXCEL SPREADSHEET, WHICH WAS PERFORMED BY THE SAME FIRM EMPLOYEE, ALSO IN 2003 (THE “1973 SPREADSHEET”). RESPONDENTS HELD NUMEROUS SEMINARS PROMOTING THEIR BOM STRATEGY IN AN EFFORT TO OBTAIN ADVISORY CLIENTS WHO WOULD BE CHARGED FEES IN RETURN FOR RESPONDENTS’ ADVISORY SERVICES. RESPONDENTS PROMOTED THE BOM STRATEGY BY USING A LENGTHY SIDESHOW AT THE SEMINAR PRESENTATIONS, AFTER PROMOTING THOSE SEMINAR PRESENTATIONS ON LUCIA’S RADIO Current Status: Summary: ©2014 FINRA. All rights reserved. Pending CONTINUED FROM #7) THE 1966 AND 1973 SPREADSHEETS PURPORTEDLY VALIDATE THE SLIDESHOW’S CENTRAL PREMISE THAT THE BOM INVESTMENT STRATEGY WOULD HAVE PROVIDED SUPERIOR OUTCOMES ACROSS HISTORICAL TIME PERIODS THAN OTHER INVESTMENT STRATEGIES, AND THUS, IS A SUPERIOR INVESTMENT STRATEGY GOING FORWARD. FOR SEVERAL REASONS, IT WAS MATERIALLY MISLEADING FOR RESPONDENTS TO CLAIM THAT THEIR ALLEGED BACKTESTING VALIDATED THE BOM STRATEGY. AMONG OTHER REASONS, RESPONDENTS DO NOT APPEAR TO HAVE ENGAGED IN THE “NUMEROUS” BACKTESTS AND DO NOT APPEAR TO HAVE “PROVEN” THAT THE BOM INVESTMENT STRATEGY WORKS. IN PRESENTING THE RESULTS OF THE PURPORTED 1966 AND 1973 BACKTESTS, RESPONDENTS DISCLOSED THAT THEY USED A HYPOTHETICAL 3% INFLATION RATE, ALTHOUGH THEY USED ACTUAL HISTORICAL DATA FOR RETURNS ON STOCKS AND BONDS. LUCIA ADMITTEDLY KNEW THAT USING A LOWER INFLATION RATE FOR THE BACKTESTS WOULD MAKE THE RESULTS LOOK MORE FAVORABLE FOR THE BOM STRATEGY. MOREOVER, ACTUAL FIGURES FOR THE INFLATION RATE DURING THE TIME PERIOD 1966 THROUGH 2003 WERE READILY AVAILABLE FROM THE DEPARTMENT OF LABOR WHEN RESPONDENTS PERFORMED THE CALCULATIONS IN 2003. RESPONDENTS DID NOT MAKE ANY PROVISION IN THE 1966 AND 1973 SPREADSHEETS FOR ADVISORY FEES. WHILE ACKNOWLEDGING THE IMPORTANCE OF FEES, RESPONDENTS DID NOT DISCLOSE TO INVESTORS THAT THEIR BACKTESTING, WHICH IS PURPORTEDLY VALIDATED BY THE 1966 AND 1973 SPREADSHEETS, DID NOT INCLUDE Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. ADVISORY FEES. IN THE CALCULATIONS FOR THE 1966 AND 1973 15
• 18. www.finra.org/brokercheck User Guidance 1966 AND 1973 SPREADSHEETS, DID NOT INCLUDE ADVISORY FEES. IN THE CALCULATIONS FOR THE 1966 AND 1973 SPREADSHEETS, RESPONDENTS FAILED TO REALLOCATE ASSETS AFTER THE BOND AND REIT BUCKETS WERE EXHAUSTED. AS A RESULT, A SUBSTANTIAL PORTION OF THE HYPOTHETICAL PORTFOLIO WAS FULLY INVESTED IN THE STOCK MARKET FROM 1981 TO 2003 (IN THE 1966 SPREADSHEET) AND FROM 1986 TO 2003 (IN THE 1973 SPREADSHEET). THIS RESULTED IN OVERSTATING THE PERFORMANCE OF THE BOM STRATEGY, AND MATERIALLY MISREPRESENTED THE RESULTS THAT COULD BE EXPECTED FROM THE BOM STRATEGY. AT ITS SEMINARS, THE FIRM PRESENTED PERFORMANCE CALCULATIONS FOR SEVERAL DIFFERENT ALLOCATION STRATEGIES WHICH PURPORT TO DEMONSTRATE THE SUPERIOR PERFORMANCE OF THE BOM STRATEGY OVER CERTAIN TIME PERIODS. THE ONLY DOCUMENTATION OF THOSE CALCULATIONS WHICH THE FIRM RETAINED, HOWEVER, CONSISTS OF TWO TWO-PAGE EXCEL SPREADSHEETS WHICH FAIL TO DUPLICATE THE ADVERTISED INVESTMENT STRATEGY. THE CALCULATIONS FAIL TO PROVIDE FOR THE REALLOCATION OF ASSETS THAT IS ONE OF THE HALLMARKS OF THE BOM STRATEGY. AS A RESULT OF THE CONDUCT, THE FIRM WILLFULLY VIOLATED SECTIONS 206(1), 206(2)AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)1(A)(5)PROMULGATED THEREUNDER; LUCIA WILLFULLY AIDED AND ABETTED AND CAUSED THE FIRM’S VIOLATIONS OF SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1(A)(5) PROMULGATED THEREUNDER; LUCIA WILLFULLY AIDED AND ABETTED AND CAUSED THE FIRM’S VIOLATIONS OF SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1(A)(5) PROMULGATED THEREUNDER; AND THE FIRM WILLFULLY VIOLATED SECTION 204 OF THE ADVISERS ACT AND RULE 204-2(A)(16) PROMULGATED HEREUNDER. IT IS ORDERED THAT THE ADMINISTRATIVE LAW JUDGE SHALL ISSUE AN INITIAL DECISION NO LATER THAN 300 DAYS FROM THE DATE OF SERVICE OF THIS ORDER, PURSUANT TO RULE 360(A)(2) OF THE COMMISSION’S RULES OF PRACTICE. ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 16
• 19. www.finra.org/brokercheck User Guidance Customer Dispute – Settled This type of disclosure event involves a consumer-initiated, investment-related complaint, arbitration proceeding or civil suit containing allegations of sale practice violations against the broker that resulted in a monetary settlement to the customer. Disclosure 1 of 2 Reporting Source: Firm Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLIENTS ALLEGE 1) VIOLATION OF COMMON LAW FRAUD; 2) BREACH OF FIDUCIARY DUTY; AND 3) NEGLIGENCE FROM 2006 TO PRESENT. Product Type: Real Estate Security Alleged Damages: $80,000.00 Is this an oral complaint? No Is this a written complaint? No Is this an arbitration/CFTC reparation or civil litigation? Yes Arbitration/Reparation forum or court name and location: FINRA Docket/Case #: 12-02221 Filing date of arbitration/CFTC reparation or civil litigation: 06/11/2012 Customer Complaint Information Date Complaint Received: 06/25/2012 Complaint Pending? No Status: Settled Status Date: 11/29/2012 Settlement Amount: $14,999.00 Individual Contribution Amount: $0.00 Summary: ©2014 FINRA. All rights reserved. I DO NOT KNOW THESE INDIVIDUALS, DID NOT MAKE ANY RECOMMENDATIONS AS TO THEIR FINANCIAL SITUATION OR INTERACT WITH THEM AS RAYMOND J. ALTHOUGH I WAS LISTED ON THE ACCOUNT Report# 23844-66066 about ALLEGED. LUCIA. Data current as of Thursday, February 06, 2014. FOR ADMINISTRATIVE PURPOSES, IN MY OPINION, CLAIMANT’S ATTORNEY 17
• 20. www.finra.org/brokercheck User Guidance Summary: RECOMMENDATIONS AS TO THEIR FINANCIAL SITUATION OR INTERACT WITH THEM AS ALLEGED. ALTHOUGH I WAS LISTED ON THE ACCOUNT FOR ADMINISTRATIVE PURPOSES, IN MY OPINION, CLAIMANT’S ATTORNEY NAMED ME IN THIS COMPLAINT BECAUSE OF MY PUBLIC PROFILE. i Reporting Source: Broker Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLIENTS ALLEGE 1) VIOLATION OF COMMON LAW FRAUD; 2) BREACH OF FIDUCIARY DUTY; AND 3) NEGLIGENCE FROM 2006 TO PRESENT. Product Type: Real Estate Security Alleged Damages: $80,000.00 Is this an oral complaint? No Is this a written complaint? No Is this an arbitration/CFTC reparation or civil litigation? Yes Arbitration/Reparation forum or court name and location: FINRA Docket/Case #: 12-02221 Filing date of arbitration/CFTC reparation or civil litigation: 06/11/2012 Customer Complaint Information Date Complaint Received: 06/25/2012 Complaint Pending? Yes Settlement Amount: Individual Contribution Amount: Summary: ©2014 FINRA. All rights reserved. I DO NOT KNOW THESE INDIVIDUALS, DID NOT MAKE ANY RECOMMENDATIONS AS TO THEIR FINANCIAL SITUATION OR INTERACT WITH THEM AS ALLEGED. ALTHOUGH I WAS LISTED ON THE ACCOUNT FOR ADMINISTRATIVE PURPOSES, IN MY OPINION, CLAIMANT’S ATTORNEY NAMED ME IN THIS COMPLAINT BECAUSE OF MY PUBLIC PROFILE. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 18
• 21. www.finra.org/brokercheck User Guidance NAMED ME IN THIS COMPLAINT BECAUSE OF MY PUBLIC PROFILE. i Disclosure 2 of 2 Reporting Source: Broker Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLIENTS ARE ALLEGING 1.) FAILURE TO SUPERVISE; AND 2.) BREACH OF FIDUCIARY DUTY IN CONNECTION WITH THE FAILURE TO EXECUTE STOP-LOSS ORDERS BETWEEN JUNE AND DECEMBER 2008. Product Type: Equity Listed (Common & Preferred Stock) Other: EXCHANGE TRADED FUNDS Alleged Damages: $24,631.00 Is this an oral complaint? No Is this a written complaint? No Is this an arbitration/CFTC reparation or civil litigation? Yes Arbitration/Reparation forum or court name and location: FINRA Docket/Case #: 09-06780 Filing date of arbitration/CFTC reparation or civil litigation: 12/01/2009 Customer Complaint Information Date Complaint Received: 12/28/2009 Complaint Pending? No Status: Settled Status Date: 01/29/2010 Settlement Amount: $18,000.00 Individual Contribution Amount: $0.00 Summary: ©2014 FINRA. All rights reserved. MR. LUCIA WAS LISTED AS A JOINT REPRESENTATIVE ON THE ACCOUNT FOR ADMINISTRATIVE PURPOSES, BUT DID NOT INTERACT WITH THE CLIENT AND MADE NO RECOMMENDATIONS OR REPRESENTATIONS, AS Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. THOSE ALLEGED, OR OTHERWISE. THE MATTER WAS SETTLED FOR 19
• 22. www.finra.org/brokercheck User Guidance CLIENT AND MADE NO RECOMMENDATIONS OR REPRESENTATIONS, AS THOSE ALLEGED, OR OTHERWISE. THE MATTER WAS SETTLED FOR BUSINESS CONSIDERATIONS IN ORDER TO AVOID THE COST OF ARBITRATION. U-4 QUESTIONS UPDATED 3/1/2010. ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 20
• 23. www.finra.org/brokercheck User Guidance Customer Dispute – Closed-No Action/Withdrawn/Dismissed/Denied This type of disclosure event involves (1) a consumer-initiated, investment-related arbitration or civil suit containing allegations of sales practice violations against the individual broker that was dismissed, withdrawn, or denied; or (2) a consumer-initiated, investment-related written complaint containing allegations that the broker engaged in sales practice violations resulting in compensatory damages of at least $5,000, forgery, theft, or misappropriation, or conversion of funds or securities, which was closed without action, withdrawn, or denied. Disclosure 1 of 2 Reporting Source: Firm Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES INC. AND SECURITIES AMERICA, INC. Allegations: CLAIMANTS ALLEGE THAT, BEGINNING IN NOVEMBER 2005 AND CONTINUING TO FEBRUARY 2009, THE REPRESENTATIVE RECOMMENDED AND SOLD THEM UNSUITABLE INVESTMENTS IN VARIABLE ANNUITIES AND VARIOUS REITS. ADDITIONAL ALLEGATIONS INCLUDE MISREPRESENATION AND MATERIAL OMISSIONS, BREACH OF FIDUCIARY DUTIES, NEGLIGENCE, FRAUD,VIOLATION OF PENNSYLVANIA CONSUMER PROTECTION LAWS AND VIOLATION OF THE PENNSYLVANIA SECURITIES ACT. Product Type: Annuity-Variable Real Estate Security Alleged Damages: $300,000.00 Alleged Damages Amount Explanation (if amount not exact): DAMAGES ARE ALLEGED IN EXCESS OF $300,000. Arbitration Information Arbitration/CFTC reparation claim filed with (FINRA, AAA, CFTC, etc.): FINRA Docket/Case #: 12-03610 Date Notice/Process Served: 10/17/2012 Arbitration Pending? No Disposition: Settled Disposition Date: 08/21/2013 Monetary Compensation Amount: $70,000.00 ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 21
• 24. www.finra.org/brokercheck User Guidance Monetary Compensation Amount: $70,000.00 Individual Contribution Amount: $23,333.33 i Reporting Source: Firm Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLAIMANTS ALLEGE 1) UNSUITABILITY; 2) MISREPRESENTATION; 3) RECKLESSNESS; AND 4) VIOLATIONS OF PENNSYLVANIA SECURITIES ACT AND UTPCPL FROM SEPTEMBER 2005 TO SEPTEMBER 2012. Product Type: Annuity-Variable Direct Investment-DPP & LP Interests Real Estate Security Alleged Damages: $300,000.00 Is this an oral complaint? No Is this a written complaint? Yes Is this an arbitration/CFTC reparation or civil litigation? No Customer Complaint Information Date Complaint Received: 09/21/2012 Complaint Pending? No Status: Evolved into Arbitration/CFTC reparation (the individual is a named party) Status Date: 10/23/2012 Settlement Amount: Individual Contribution Amount: Arbitration Information Arbitration/CFTC reparation claim filed with (FINRA, AAA, CFTC, etc.): FINRA Docket/Case #: 12-03610 ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 22
• 25. www.finra.org/brokercheck User Guidance Date Notice/Process Served: 10/23/2012 Arbitration Pending? No Disposition: Settled Disposition Date: 08/21/2013 Monetary Compensation Amount: $70,000.00 Individual Contribution Amount: $23,333.00 Civil Litigation Information Type of Court: State Court Name of Court: COURT OF COMMON PLEAS OF PHILADELPHIA COUNTY Location of Court: PHILADELPHIA COUNTY, PA Docket/Case #: 003472 Date Notice/Process Served: 07/30/2012 Litigation Pending? No Disposition: Other: REFERRED TO FINRA ARBITRATION Disposition Date: 10/10/2012 i Reporting Source: Broker Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLAIMANTS ALLEGE 1) UNSUITABILITY; 2) MISREPRESENTATION; 3) RECKLESSNESS; AND 4) VIOLATIONS OF PENNSYLVANIA SECURITIES ACT AND UTPCPL FROM SEPTEMBER 2005 TO SEPTEMBER 2012. Product Type: Annuity-Variable Direct Investment-DPP & LP Interests Real Estate Security Alleged Damages: $300,000.00 Is this an oral complaint? No Is this a written complaint? Yes Is this an arbitration/CFTC reparation or civil litigation? ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 23
• 26. www.finra.org/brokercheck User Guidance Is this an arbitration/CFTC reparation or civil litigation? No Customer Complaint Information Date Complaint Received: 09/21/2012 Complaint Pending? No Status: Evolved into Arbitration/CFTC reparation (the individual is a named party) Status Date: 10/23/2012 Settlement Amount: Individual Contribution Amount: Arbitration Information Arbitration/CFTC reparation claim filed with (FINRA, AAA, CFTC, etc.): FINRA Docket/Case #: 12-03610 Date Notice/Process Served: 10/23/2012 Arbitration Pending? Yes Civil Litigation Information Type of Court: State Court Name of Court: COURT OF COMMON PLEAS OF PHILADELPHIA COUNTY Location of Court: PHILADELPHIA COUNTY, PA Docket/Case #: 003472 Date Notice/Process Served: 07/30/2012 Litigation Pending? No Disposition: Other: REFERRED TO FINRA ARBITRATION Disposition Date: 10/10/2012 Summary: ©2014 FINRA. All rights reserved. MR. LUCIA MADE NO RECOMMENDATIONS TO CLAIMANTS PERSONALLY OR THROUGH AGENTS, SZTROM AND PARRILLO. FURTHER, IT APPEARS THAT CLAIMANTS ARE ATTEMPTING TO BENEFIT FROM ALLEGATIONS MADE BY THE SEC’S ORDER OF ADMINISTRATIVE PROCEEDING TO RECOVER LOSSES THEY INCURRED BY LIQUIDATING INVESTMENTS AS PER THE RECOMMENDATIONS OF A NEW INVESTMENT ADVISOR. MR. Report# 23844-66066 about RAYMOND J. LUCIA. Data current asTHIS ALLEGATION. 2014. LUCIA INTENDS TO VIGOROUSLY DEFEND of Thursday, February 06, 24
• 27. www.finra.org/brokercheck User Guidance PER THE RECOMMENDATIONS OF A NEW INVESTMENT ADVISOR. MR. LUCIA INTENDS TO VIGOROUSLY DEFEND THIS ALLEGATION. i Disclosure 2 of 2 Reporting Source: Firm Employing firm when activities occurred which led to the complaint: THE ADVISORS GROUP, INC. Allegations: IN CONNECTION WITH A VUL POLICY, CLIENT ALLEGES THAT RR MISREPRESENTED PRODUCT AS A PRIVATE PENSION PLAN AND INDUCED CLIENT TO PURCHASE POLICY BY REPLACING PORTION OF EXISTING POLICY WHICH IS IN JEOPOARDY OF LAPSING. Product Type: Other Other Product Type(s): VUL Alleged Damages: $69,636.00 Customer Complaint Information Date Complaint Received: 10/22/2002 Complaint Pending? No Status: Denied Status Date: 02/10/2003 Settlement Amount: Individual Contribution Amount: i Reporting Source: Broker Employing firm when activities occurred which led to the complaint: THE ADVIORS GROUP, INC Allegations: IN CONNECTION WITH A VL POLICY, CLIENT ALLEGES THAT RR MISREPRESENTED PRODUCT AS PRIVATE PENSION PLAN AND INDUCED CLIENT TO PURCHASE POLICY BY REPLACING PORTION OF EXISTING POLICY WHICH IS IN JEOPARDY OF LAPSING. Product Type: Annuity(ies) – Variable $69,636.00 ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 25
• 28. www.finra.org/brokercheck Alleged Damages: User Guidance $69,636.00 Customer Complaint Information Date Complaint Received: 10/22/2002 Complaint Pending? No Status: Denied Status Date: 02/10/2003 Settlement Amount: Individual Contribution Amount: Summary: ©2014 FINRA. All rights reserved. ACACIA LIFE ERRONEOUSLY INFORMED CUSTOMER THAT HIS POLICY WAS A MEC. IT IS NOT. CUSTOMER FAILED TO PAY HIS REQUIRED ANNUAL PREMIUMS, DESPITE SEVERAL NOTICES, AND DUE TO THIS AND THE DECLINE IN THE STOCK MARKET HIS JOHN HANCOCK POLICY IS IN JEOPARDY. CUSTOMER MISTAKENLY BELIEVED THE OLD POLICY WOULD PRODUCE A BETTER RESULT THAN THE NEW POLICY. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 26
• 29. www.finra.org/brokercheck User Guidance Customer Dispute – Pending This type of disclosure event involves (1) a pending consumer-initiated, investment-related arbitration or civil suit that contains allegations of sales practice violations against the broker; or (2) a pending, consumer-initiated, investmentrelated written complaint containing allegations that the broker engaged in, sales practice violations resulting in compensatory damages of at least $5,000, forgery, theft, or misappropriation, or conversion of funds or securities. Disclosure 1 of 8 Reporting Source: Firm Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLAIMANTS ALLEGE 1) VIOLATION OF COMMON LAW FRAUD; 2) BREACH OF FIDUCIARY DUTY; 3) UNSUITABILITY; AND 4) NEGLIGENCE. Product Type: Real Estate Security Alleged Damages: $150,000.00 Is this an oral complaint? No Is this a written complaint? No Is this an arbitration/CFTC reparation or civil litigation? Yes Arbitration/Reparation forum or court name and location: FINRA Docket/Case #: 13-02403 Filing date of arbitration/CFTC reparation or civil litigation: 08/12/2013 Customer Complaint Information Date Complaint Received: 09/04/2013 Complaint Pending? Yes Settlement Amount: Individual Contribution Amount: i Disclosure 2 of 8 Reporting Source: ©2014 FINRA. All rights reserved. Firm Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 27
• 30. www.finra.org/brokercheck User Guidance Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLAIMANTS ALLEGE: 1) COMMON LAW FRAUD, BREACH OF FIDUCIARY DUTY, AND 3) NEGLIGENCE. Product Type: Real Estate Security Alleged Damages: $250,000.00 Is this an oral complaint? No Is this a written complaint? No Is this an arbitration/CFTC reparation or civil litigation? Yes Arbitration/Reparation forum or court name and location: FINRA Docket/Case #: 13-02369 Filing date of arbitration/CFTC reparation or civil litigation: 08/05/2013 Customer Complaint Information Date Complaint Received: 08/22/2013 Complaint Pending? Yes Settlement Amount: Individual Contribution Amount: i Disclosure 3 of 8 Reporting Source: Firm Employing firm when activities occurred which led to the complaint: SECURITIES AMERICA AND FIRST ALLIED SECURITIES, INC. Allegations: CLAIMANTS ALLEGE 1) UNSUITABILITY; 2) BREACH OF FIDUCIARY DUTY; 3) NEGLIGENCE; AND 4) BREACH OF CONTRACT REGARDING CERTAIN REIT PURCHASES Product Type: Real Estate Security ©2014 FINRA. All rights reserved. $0.00 Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 28
• 31. www.finra.org/brokercheck User Guidance Alleged Damages: $0.00 Alleged Damages Amount Explanation (if amount not exact): NO DAMAGE AMOUNT ALLEGED. Arbitration Information Arbitration/CFTC reparation claim filed with (FINRA, AAA, CFTC, etc.): FINRA Docket/Case #: 13-01120 Date Notice/Process Served: 07/01/2013 Arbitration Pending? Yes i Disclosure 4 of 8 Reporting Source: Firm Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. AND SECURITIES AMERICA, INC. Allegations: IN CONNECTION WITH THE RECOMMENDATION TO INVEST IN REITS IN LATE 2004, CLAIMANTS ALLEGE UNSUITABILITY, BREACH OF FIDUCIARY DUTY, NEGLIGENCE, AND BREACH OF CONTRACT. Product Type: Real Estate Security Alleged Damages: $5,000.00 Alleged Damages Amount Explanation (if amount not exact): ALLEGED DAMAGES ARE NOT SPECIFIED BUT THE FIRM HAS MADE A GOOD FAITH DETERMINATION THAT DAMAGES FROM THE ALLEGED CONDUCT WOULD BE GREATER THAN $5,000. Arbitration Information Arbitration/CFTC reparation claim filed with (FINRA, AAA, CFTC, etc.): FINRA Docket/Case #: 13-01120 Date Notice/Process Served: 07/01/2013 Arbitration Pending? Yes ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 29
• 32. www.finra.org/brokercheck User Guidance i Disclosure 5 of 8 Reporting Source: Firm Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLAIMANT ALLEGES: 1) BREACH OF FIDUCIARY DUTY; 2) UNSUITABILITY; 3) NEGLIGENCE; AND 4) VIOLATION OF STATE SECURITIES LAWS FROM JUNE 2006 THROUGH JUNE 2008. Product Type: Real Estate Security Alleged Damages: $667,483.17 Alleged Damages Amount Explanation (if amount not exact): CLAIMANT ALSO ASKS FOR INTEREST AT $164.49 PER DAY. Is this an oral complaint? No Is this a written complaint? Yes Is this an arbitration/CFTC reparation or civil litigation? No Customer Complaint Information Date Complaint Received: 02/05/2013 Complaint Pending? No Status: Evolved into Arbitration/CFTC reparation (the individual is a named party) Status Date: 05/16/2013 Settlement Amount: Individual Contribution Amount: Arbitration Information Arbitration/CFTC reparation claim filed with (FINRA, AAA, CFTC, etc.): FINRA Docket/Case #: 13-01459 Date Notice/Process Served: 05/28/2013 ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 30
• 33. www.finra.org/brokercheck User Guidance Date Notice/Process Served: Arbitration Pending? Yes i Disclosure 6 of 8 Reporting Source: Firm Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLAIMANT ALLEGES 1) COMMON LAW FRAUD; 2) BREACH OF FIDUCIARY DUTY; AND 3) NEGLIGENCE. Product Type: Real Estate Security Alleged Damages: $100,000.00 Is this an oral complaint? No Is this a written complaint? No Is this an arbitration/CFTC reparation or civil litigation? Yes Arbitration/Reparation forum or court name and location: FINRA Docket/Case #: 13-00058 Filing date of arbitration/CFTC reparation or civil litigation: 01/02/2013 Customer Complaint Information Date Complaint Received: 01/17/2013 Complaint Pending? Yes Settlement Amount: Individual Contribution Amount: i Reporting Source: Broker Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 31
• 34. www.finra.org/brokercheck User Guidance Allegations: CLAIMANT ALLEGES 1) COMMON LAW FRAUD; 2) BREACH OF FIDUCIARY DUTY; AND 3) NEGLIGENCE. Product Type: Real Estate Security Alleged Damages: $100,000.00 Is this an oral complaint? No Is this a written complaint? No Is this an arbitration/CFTC reparation or civil litigation? Yes Arbitration/Reparation forum or court name and location: FINRA Docket/Case #: 13-00058 Filing date of arbitration/CFTC reparation or civil litigation: 01/02/2013 Customer Complaint Information Date Complaint Received: 01/17/2013 Complaint Pending? Yes Settlement Amount: Individual Contribution Amount: Summary: MR. LUCIA IS NOT A NAMED RESPONDENT IN THIS CASE. HE DID NOT MEET WITH THE CLAIMANT AND MADE NO INDIVIDUAL RECOMMENDATIONS TO PURCHASE THE INVESTMENTS OF WHICH THE CLAIMANT NOW COMPLAINS. IT APPEARS THAT CLAIMANTS ARE ATTEMPTING TO BENEFIT FROM ALLEGATIONS MADE BY THE SEC’S ORDER OF ADMINISTRATIVE PROCEEDING TO RECOVER ALLEGED LOSSES. i Disclosure 7 of 8 Reporting Source: Firm Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLAIMANTS ALLEGE: 1) VIOLATION OF COMMON LAW FRAUD; 2) BREACH OF FIDUCIARY DUTY; AND 3) NEGLIGENCE. ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 32
• 35. www.finra.org/brokercheck User Guidance Allegations: OF FIDUCIARY DUTY; AND 3) NEGLIGENCE. Product Type: Real Estate Security Alleged Damages: $250,000.00 Is this an oral complaint? No Is this a written complaint? No Is this an arbitration/CFTC reparation or civil litigation? Yes Arbitration/Reparation forum or court name and location: FINRA Docket/Case #: 12-03958 Filing date of arbitration/CFTC reparation or civil litigation: 11/14/2012 Customer Complaint Information Date Complaint Received: 11/29/2012 Complaint Pending? Yes Settlement Amount: Individual Contribution Amount: i Reporting Source: Broker Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: CLAIMANTS ALLEGE: 1) VIOLATION OF COMMON LAW FRAUD; 2) BREACH OF FIDUCIARY DUTY; AND 3) NEGLIGENCE. Product Type: Real Estate Security Alleged Damages: $250,000.00 Is this an oral complaint? No Is this a written complaint? No Is this an arbitration/CFTC reparation or civil litigation? ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 33
• 36. www.finra.org/brokercheck User Guidance Is this an arbitration/CFTC reparation or civil litigation? Yes Arbitration/Reparation forum or court name and location: FINRA Docket/Case #: 12-03958 Filing date of arbitration/CFTC reparation or civil litigation: 11/14/2012 Customer Complaint Information Date Complaint Received: 11/29/2012 Complaint Pending? Yes Settlement Amount: Individual Contribution Amount: Summary: MR. LUCIA IS NOT A NAMED RESPONDENT IN THIS CASE. HE DID NOT MEET WITH CLAIMANTS AND MADE NO INDIVIDUAL RECOMMENDATIONS TO PURCHASE THE INVESTMENTS OF WHICH THEY COMPLAIN. IT APPEARS THAT CLAIMANTS ARE ATTEMPTING TO BENEFIT FROM ALLEGATIONS MADE BY THE SEC’S ORDER OF ADMINISTRATIVE PROCEEDING TO RECOVER THEIR ALLEGED LOSSES. i Disclosure 8 of 8 Reporting Source: Broker Employing firm when activities occurred which led to the complaint: FIRST ALLIED SECURITIES, INC. Allegations: ©2014 FINRA. All rights reserved. IN MAY 2008, THE INVESTOR PURCHASED A REAL ESTATE INVESTMENT TRUST (REIT) FOR $500,000 THROUGH THE BROKER-DEALER, FIRST ALLIED SECURITIES, INC. OVER FOUR YEARS LATER, THE INVESTOR NOW RAISES SUITABILITY CONCERNS NOTWITHSTANDING HIS WRITTEN ACKNOWLEDGEMENT OF RECEIPT FOR THE PROSPECTUS AND OTHER DISCLOSURES, AND FURTHER NOTWITHSTANDING THAT HE PROVIDED FINANCIAL INFORMATION SUPPORTING HIS SUITABILITY FOR THE INVESTMENT. THE INVESTOR’S CONCERNS APPEAR TO BE BASED ON COMMUNICATIONS RECEIVED FROM THE REIT SPONSOR RELATED TO A DECREASE IN DISTRIBUTIONS. THE INVESTOR FAILS TO MENTION THE FACT THAT HE HAD PURCHASED ANOTHER REIT IN 2006 AND HAD PRIOR REIT EXPERIENCE. A WRITTEN RESPONSE WAS SENT TO THE INVESTOR Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. BY OUTSIDE LEGAL COUNSEL DENYING THE ALLEGATIONS. 34
• 37. www.finra.org/brokercheck User Guidance REIT EXPERIENCE. A WRITTEN RESPONSE WAS SENT TO THE INVESTOR BY OUTSIDE LEGAL COUNSEL DENYING THE ALLEGATIONS. Product Type: Real Estate Security Alleged Damages: $297,500.00 Is this an oral complaint? No Is this a written complaint? Yes Is this an arbitration/CFTC reparation or civil litigation? No Customer Complaint Information Date Complaint Received: 08/11/2012 Complaint Pending? Yes Settlement Amount: Individual Contribution Amount: Summary: ©2014 FINRA. All rights reserved. MR. LUCIA MAINTAINS THAT THE TRANSACTION IN QUESTION WAS SUITABLE. THE INVESTOR UNDERSTOOD THE RISKS RELATED TO THE INVESTMENT IN QUESTION AND HAD PRIOR EXPERIENCE INVESTING IN REAL ESTATE, INCLUDING REAL ESTATE INVESTMENT TRUSTS. MR. LUCIA DENIES THE ALLEGATIONS AND INTENDS TO VIGOROUSLY DEFEND HIMSELF. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 35
• 38. www.finra.org/brokercheck User Guidance Employment Separation After Allegations This type of disclosure event involves a situation where the broker voluntarily resigned, was discharged, or was permitted to resign after being accused of (1) violating investment-related statutes, regulations, rules or industry standards of conduct; (2) fraud or the wrongful taking of property; or (3) failure to supervise in connection with investment-related statutes, regulations, rules, or industry standards of conduct. Disclosure 1 of 1 Reporting Source: Firm Employer Name: RJL WEALTH MANAGEMENT, LLC Termination Type: Voluntary Resignation Termination Date: 07/12/2013 Allegations: RAYMOND J LUCIA COMPANIES, INC. (“RJLC”) VIOLATED SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1(A)(5) PROMULGATED THEREUNDER; LUCIA AIDED AND ABETTED AND CAUSED RJLC’S VIOLATIONS OF SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1(A)(5) PROMULGATED THEREUNDER; LUCIA AIDED AND ABETTED AND CAUSED RJLC’S VIOLATIONS OF SECTIONS 206(1), 206(2) AND 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1(A)(5) PROMULGATED THEREUNDER; AND RJLC VIOLATED SECTION 204 OF THE ADVISERS ACT AND RULE 204-2(A)(16) PROMULGATED THEREUNDER. Product Type: No Product Summary: ©2014 FINRA. All rights reserved. SEC INITIAL DECISION RELEASE 495, JULY 8, 2013: IT IS ORDERED THAT, PURSUANT TO SECTION 203(E) OF THE ADVISERS ACT, THE REGISTRATION OF LUCIA AS AN INVESTMENT ADVISER IS REVOKED. LUCIA IS PERMANENTLY BARRED FROM ASSOCIATION WITH INVESTMENT ADVISERS, BROKERS, OR DEALERS. LUCIA SHALL CEASE AND DESIST FROM AIDING AND ABETTING OR CAUSING THE COMMISSION OF, ANY VIOLATIONS OR FUTURE VIOLATIONS OF SECTIONS 206(1), 206(2), AND 206(4) OF THE ADVISERS ACT AND SHALL PAY A CIVIL MONEY PENALTY IN THE AMOUNT OF $50,000. PAYMENT OF PENALTIES, DISGORGEMENT, PLUS INTEREST, SHALL BE MADE ON THE FIRST DAY FOLLOWING THE DAY THE INITIAL DECISION BECOMES FINAL. THE INITIAL DECISION SHALL BECOME EFFECTIVE IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF RULE 360 OF THE COMMISSION’S RULES OF PRACTICE, 17 C.F.R. § 201.360. PURSUANT TO THAT RULE, MR. LUCIA MAY FILE A PETITION FOR REVIEW OF THIS INITIAL DECISION WITHIN TWENTY-ONE DAYS AFTER SERVICE OF THE INITIAL DECISION. MR. LUCIA MAY ALSO FILE A MOTION TO CORRECT A MANIFEST ERROR OF FACT WITHIN TEN DAYS OF THE INITIAL DECISION, PURSUANT TO RULE 111 OF THE COMMISSION’S RULES OF PRACTICE, 17 C.F.R. § 201.111. IF A MOTION TO CORRECT A MANIFEST Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. ERROR OF FACT IS FILED BY MR. LUCIA, THEN HE WILL HAVE 21 DAYS TO 36
• 39. www.finra.org/brokercheck User Guidance OF PRACTICE, 17 C.F.R. § 201.111. IF A MOTION TO CORRECT A MANIFEST ERROR OF FACT IS FILED BY MR. LUCIA, THEN HE WILL HAVE 21 DAYS TO FILE A PETITION FOR REVIEW FROM THE DATE OF THE ORDER RESOLVING THE MOTION TO CORRECT MANIFEST ERROR OF FACT. THE INITIAL DECISION WILL NOT BECOME FINAL UNTIL THE COMMISSION ENTERS AN ORDER OF FINALITY. THE COMMISSION WILL ENTER AN ORDER OF FINALITY UNLESS MR. LUCIA FILES A PETITION FOR REVIEW OR MOTION TO CORRECT MANIFEST ERROR OF FACT OR THE SEC DETERMINES ON ITS OWN INITIATIVE TO REVIEW THE DECISION. IT SHOULD BE NOTED THAT THERE IS NO ALLEGATION OR FINDING IN THE INITIAL DECISION THAT ANY INVESTOR ACCOUNT WAS MISHANDLED IN ANY WAY, OR THAT ANY INVESTOR SUFFERED ANY MONETARY LOSS AS A RESULT OF THE VIOLATIONS. PRIOR TO THE INTIAL ORDER BEING ENTERED, THERE WERE NO CUSTOMER COMPLAINTS RELATED TO THE POWERPOINT PRESENTATION WHICH WAS THE SUBJECT OF THE ALLEGATIONS. ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 37
• 40. www.finra.org/brokercheck User Guidance End of Report This page is intentionally left blank. ©2014 FINRA. All rights reserved. Report# 23844-66066 about RAYMOND J. LUCIA. Data current as of Thursday, February 06, 2014. 38