CNBC Financial Analyst Turned Fugitive Arrested After 3 Years on the Run

CNBC Financial Analyst Turned Fugitive Arrested After 3 Years on the Run
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A for­mer CNBC finan­cial pun­dit and CEO-turned-fugi­tive, James Arthur McDon­ald Jr., has been arrest­ed by the FBI in Port Orchard, Wash­ing­ton after being on the run for near­ly three years. 

McDon­ald was accused of defraud­ing mil­lions from his investors fol­low­ing a failed “bet against” the US econ­o­my in 2020.

McDon­ald was the for­mer CEO and chief invest­ment offi­cer of two Los Ange­les finan­cial com­pa­nies, Her­cules Invest­ments LLC and Index Strat­e­gy Advi­sors Inc. He fre­quent­ly appeared as an ana­lyst on CNBC.

In ear­ly 2020, McDon­ald report­ed­ly lost tens of mil­lions of his clients’ funds after tak­ing a risky short posi­tion that effec­tive­ly bet against the US econ­o­my in the after­math of the pres­i­den­tial election. 

When the antic­i­pat­ed mar­ket down­turn nev­er mate­ri­al­ized, Her­cules lost between $30-$40 mil­lion of clients’ money.

By Decem­ber 2020, investors began com­plain­ing about the loss­es in their accounts. McDon­ald then alleged­ly solicit­ed mil­lions more from investors, mis­rep­re­sent­ing how the funds would be used and fail­ing to dis­close Her­cules’ pre­vi­ous mas­sive losses.

The for­mer finan­cial ana­lyst is accused of using some of the investor funds for per­son­al expens­es, includ­ing a Porsche pur­chase and design­er cloth­ing. He also alleged­ly sent fal­si­fied account state­ments to clients.

McDon­ald had been a fugi­tive since Novem­ber 2021 after fail­ing to appear before the SEC to tes­ti­fy about the accu­sa­tions of defraud­ing investors. 

He has now been charged with secu­ri­ties fraud, wire fraud, invest­ment advis­er fraud, and engag­ing in unlaw­ful mon­e­tary trans­ac­tions. If con­vict­ed, he could face up to 20 years in fed­er­al prison.

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