Former television financial analyst arrested for fraud after years in hiding

After more than two years on the run, a former investment firm CEO and television financial analyst was arrested last weekend and faces federal fraud charges in Los Angeles.

James Arthur McDonald Jr. lied about, among other things, his Harvard education and the use of millions of dollars he received from his clients, according to charging documents filed last year in U.S. District Court.

McDonald, who frequently appeared as a guest analyst on CNBC, embezzled at least $675,000 from investors, including nearly $175,000 he spent at a Porsche dealership, court documents say.

McDonald’s attorney did not respond to a request for comment.

McDonald lost between $30 million and $40 million after taking a risky short position during the 2020 presidential election, betting against the U.S. economy, prosecutors said.

To repay his clients and avoid disclosing the losses, McDonald raised additional money by selling shares in his company and concealing the use of the proceeds, the indictment says.

Court documents show that McDonald also misled people about his education. Although he regularly refers to his economics degree from Harvard University, McDonald is a graduate of the Harvard Extension School, an open-entry college.

Investigators found that he had only taken a single economics course during his studies there.

McDonald has been a fugitive since November 2021, when he failed to appear before the U.S. Securities and Exchange Commission to face allegations that he cheated investorssaid a press release from the US Attorney’s Office.

According to a criminal complaint, McDonald told a former partner and business partner that he was going to “disappear” after the SEC subpoenaed him to testify. Authorities found him this month at an apartment in Port Orchard, Washington, and arrested him.

McDonald, former CEO of Hercules Investments LLC and Index Strategy Advisors, appeared in court on June 17 and waived his right to a detention hearing in the Western District of Washington. He remains incarcerated and awaits extradition to Los Angeles.