Former REP. Outstanding Advisor Accused of Faulty Backtesting

Former REP. Outstanding Advisor Accused of Faulty Backtesting

One of REP. magazine’s former Outstanding Advisor Award winners, Raymond Lucia Sr., has been charged by the Securities and Exchange Commission for misleading investors about his “Buckets of Money” strategy.

Lucia, a radio personality based in San Diego, Calif., won REP.’s Outstanding Advisor Award (now known as the Advisors with Heart Awards) in 2004. Here’s what the SEC had to say:

Lucia, who lives in the San Diego area, and his company formerly named Raymond J. Lucia Companies Inc. (RJL) allegedly presented a lengthy slideshow at the seminars indicating that extensive backtesting proved that the Buckets of Money strategy would provide inflation-adjusted income to retirees while protecting and even increasing their retirement savings. However despite the claims they made publicly, Lucia and RJL performed scant, if any, actual backtesting of the Buckets of Money strategy.

“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.”

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