Ex-CNBC pundit James McDonald accused of fraud

A financial adviser who appeared frequently on CNBC is wanted for fraud, according to a complaint announced by federal prosecutors on Wednesday.

James Arthur McDonald Jr., 50, ran two Los Angeles-based investment firms called Hercules Investments and Index Strategy Advisors. Federal prosecutors charged McDonald with one count of securities fraud for allegedly lying to investors.

McDonald, who faces up to 20 years in prison if convicted, “is believed to be in hiding,” the U.S. Attorney’s office said in a news release.

In late 2020, Hercules clients lost between $30 million and $40 million after McDonald took a “risky short position” that hinged on the stock market tanking after the presidential election, prosecutors allege.

“McDonald projected that the COVID-19 pandemic and the election would result in large sales that would send the stock market down,” the U.S. attorney’s office said in its release.