JUST IN: Ex-CNBC Analyst Arrested After Years On The Run


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A former financial analyst for CNBC was arrested by the FBI over the weekend on charges of evading the Securities and Exchange Commission, bringing a years-long manhunt to an eventful end.

Nearly three years ago, James Arthur McDonald Jr. skipped out on a meeting with the SEC over allegations that he defrauded investors in his hedge fund to the tune of millions of dollars. He had since been on the lam until federal agents located him in a home in Port Orchard, a town of approximately 18,000 about an hour’s drive from Seattle. McDonald is expected to be arraigned in Tacoma, WA on Tuesday, Deadline reported.

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In its announcement, the Department of Justice said McDonald, who previously served as CEO for Hercules Investments, faces “a statutory maximum sentence of 20 years in federal prison for each securities fraud and wire fraud count” against him. The alleged financial fraudster is also facing “up to 10 years in federal prison on the monetary transactions derived from unlawful activity count, and up to five years in federal prison on the investment adviser fraud count.”

The outlet added that the office of U.S. Attorney for Central California Martin Estrada expects McDonald to be transported to Los Angeles County later this month for a continuance of the case.

For years, McDonald appeared as a financial analyst on CNBC, offering his insights into the market and how viewers might find value in some of Wall Street’s hottest stocks of the day. He resigned in July 2021 after news surfaced that the SEC was investigating his company for embezzlement and did not appear for a scheduled sit-down with the agency in November of that year.

According to the DOJ, Hercules Investments lost tens of millions of dollars after betting big that the stock market would collapse during the onset of the COVID-19 pandemic in the midst of a presidential election year. Instead, the market quickly rebounded, reaching new heights and leaving McDonald to allegedly obscure financial documents in an attempt to hide his losses.

In a fraud action brought against McDonald two years ago, the DOJ notes, “McDonald engaged in a scheme to defraud whereby he defrauded… investors by making and/or disseminating false and misleading statements, misused investor funds by using them to pay his personal expenses, to pay Hercules clients and/or creditors, and to pay Ponzi-like returns to investors.”

Despite the seismically wrong bet, McDonald still collected a hefty cushion for himself, according to the DOJ. He allotted at least $700,000 for personal use in just one instance of many, and in addition was “spending roughly $174,610 of them at a Porsche dealership,” the DOJ laid out Monday, Deadline reported. “Approximately $109,512 was transferred to the landlord of a home McDonald was renting in Arcadia; and approximately $6,800 was spent on a website that sells designer menswear,” prosecutors added.

Earlier this year, a federal judge ruled that McDonald is responsible for paying back $3,810, 346, the amount that federal investigators say he netted in profit over that period. Officials with the FBI, IRS, and Assistant U.S. Attorney Alexander B. Schwab of the Corporate and Securities Fraud Strike Force have been working with the prosecution since McDonald’s arrest.

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Scoop Diggins