Former CNBC financial analyst and investor arrested in WA for fraud

A former financial analyst and investor who had been on the FBI’s most wanted fugitives list since 2021 has been captured.

The man was tracked down and arrested in Port Orchard, Washington June 15. James Arthur McDonald, 52, was chief investment officer and CEO of two California-based companies, Hercules Investments LLC and Index Strategy Advisors Inc.

MyNorthwest.com reported, according to CNBC, that McDonald appeared as a “paid contributor” on several of the network’s financial shows in 2020 and 2021.

According to Fox Business and other sources, McDonald ran into serious financial trouble in 2020 when he lost millions of dollars in Hercules investment money. He had taken a risky “short” position, betting against the health of the U.S. economy and the post-Covid recovery by investing.

According to the US Attorney’s Office:

“McDonald predicted that the COVID-19 pandemic and the election would lead to major sell-offs that would cause the stock market to collapse,” the U.S. Attorney’s Office said. “When the market decline failed to materialize, Hercules customers lost between $30 million and $40 million. In December 2020, Hercules customers complained to company employees about the losses in their accounts.”

At the beginning of 2021, he then asked investors for several million dollars for an alleged investment for Hercules. However, he gave false information about the intended use of the funds.

“In total, according to the Securities and Exchange Commission, McDonald “collected more than $5.1 million from 23 investors and customers and embezzled more than $2.9 million of those funds for personal expenses and Ponzi-like payments to former investors.”

Authorities did not disclose how he was tracked down, but he was tracked down to a Port Orchard, WA resident and arrested on June 15. Before his disappearance, he had disabled his phone and other digital communication devices and implied to other people that he might “disappear.” He evaded capture for nearly four years. If convicted on all charges, he could face 20 years in prison.