“Rather fail with honor than succeed by fraud.” - Sophocles
James Arthur McDonald Jr. was on CNBC in March 2021 warning of a disconnect between Main Street and Wall Street.
Undisclosed was a bigger disconnect.
As the business news network presented McDonald as a market expert, his clients had been complaining of massive losses for months.
McDonald, 53, was a paid contributor on CNBC as well as the CEO of two investment firms in Los Angeles: Hercules Investments and Index Strategy Advisors Inc.
He’d made a big bet that President Joe Biden was due for a downturn that never came.
“McDonald projected that the COVID-19 pandemic and the election would result in major selloffs that would cause the stock market to drop,” according to the Justice Department. “When the market decline didn’t occur, Hercules clients lost between $30 million and $40 million.”
McDonald didn’t just lose his customers’ money. He misappropriated millions to pay business expenses, rent, credit card bills and even a 2021 Porsche 911 Turbo S Cabriolet for $174,000. He also misrepresented how he invested client funds.
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