James McDonald Jr. Arrested for Investment Fraud 

Former Advisor and CNBC Pundit, James McDonald Jr. Arrested After Three Years on the Run 

James Arthur McDonald Jr., a former CNBC pundit and financial advisor, has reportedly been apprehended by federal authorities in Port Orchard, Washington, following “three years on the lam”, according to FA mag. Once a prominent figure in the finance world, McDonald had been accused of defrauding investors out of millions and reportedly evaded authorities after failing to appear for an SEC testimony in 2021.  

The Arrest 

The U.S. Attorney’s Office for the Central District of California reportedly confirmed McDonald’s arrest, which took place on June 15, 2024. McDonald, who once led Los Angeles-based Hercules Investments LLC and Index Strategy Advisors Inc. (ISA) in Redondo Beach, was apprehended at a residence and has since made an initial court appearance in Tacoma, Washington. He is expected to be transferred to Los Angeles for further legal proceedings. 

The Charges 

McDonald faces the following allegations: 

• Securities Fraud: Engaging in deceptive practices to mislead investors. 
• Wire Fraud: Using electronic communication to carry out fraudulent schemes. 
• Investment Adviser Fraud: Misusing his position to defraud clients. 
• Monetary Transactions Derived from Unlawful Activity: Using illicitly gained funds for personal transactions. 

If convicted, McDonald could face up to 20 years in prison for each count of securities and wire fraud, and additional years for the other charges. 

James McDonald Jr. – Alleged Fraudulent Activities 

McDonald is accused of misrepresenting to investors how he would use the millions of dollars raised from them in early 2021 and failing to disclose to those investors “the massive losses” that his Hercules Investments LLC had sustained. According to an article in CNBC, an FBI agent said McDonald, who had lived in California, falsely claims to have a bachelor’s degree in economics from Harvard University, but instead, graduated from the Harvard Extension School. 

McDonald’s alleged fraudulent activities include the following: 

• Investor Losses: He allegedly defrauded 23 investors and clients of over $5.1 million, directing $2.9 million for personal use and Ponzi-like repayments. 
• Risky Investment Strategy: Using a purportedly aggressive short-selling strategy post-2020 U.S. presidential election led to massive client losses estimated between $30 million and $40 million. 
• Misleading Capital Raise: In early 2021, McDonald allegedly solicited millions from clients under false pretenses, failing to disclose previous losses and misusing the funds. 

McDonald reportedly made personal expenditures of luxury car purchases, rent payments for a high-end home, and shopping sprees at a designer menswear store. 

The Investigation 

The Federal Bureau of Investigation (FBI) and the Internal Revenue Service Criminal Investigation (IRS-CI) have reportedly been tracking McDonald, which led to the apprehension.  

Free Consultation with a Securities Attorney 

If you have suffered investment losses, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510. 
 
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.    

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.            

With over 30 years of securities law experience, The White Law Group has the expertise to help investors to recover their securities fraud losses.