Following the onset of COVID-19, a former resident of Arcadia who frequently appeared as a financial commentator on CNBC was accused Wednesday of misleading investors about the state of his financial company and its dangerous assets. He was accused of covering up the large loss caused by the -19 pandemic.
According to the prosecution, McDonald served as CEO of Redondo Beach-based Index Strategy Advisors Inc. and Los Angeles-based Hercules Investments.
James Arthur McDonald Jr., 50, who is said to be in hiding, has been charged with one count of securities fraud, according to the U.S. Attorney’s Office.
According to the U.S. Attorney’s Office, McDonald’s customers of Hercules lost between $30 million and $40 million due to their unsuccessful “short” investment, which was caused by the onset of the pandemic and the uncertainty surrounding the 2020 presidential election. The stock market will subsequently experience a major crash.
Prosecutors say McDonald’s received a $675,000 investment from a group of victims in March 2021, but the company misappropriated the money by paying $109,000 to the home owner and spending $174,000 at a Porsche dealership. was paying $6,800 for a rental in Arcadia. men’s clothing website.
In early 2021, unable to collect user fees due to significant losses, McDonald’s began to seek additional investment; nevertheless, they allegedly made false statements about the use of the funds and the huge losses suffered by Hercules. failed to reveal because of his “younger” position from the previous year.
Additionally, prosecutors claim he misrepresented clients that his company, Index Strategy Advisors, was a registered investment adviser when, in fact, it had not been since 2019. Additionally, he allegedly provided false account information to customers of this company. One of those clients allegedly invested $351,000 in the business, but when the investor tried to use the funds to purchase a home, they were lost, the prosecution alleges.
In November 2021, McDonald was scheduled to appear before the United States Securities and Exchange Commission, but he did not. He allegedly disconnected his phone lines, stopped using his email and informed a man that he intended to “disappear”, according to the prosecution.
A federal prison sentence of up to 20 years is possible for the securities fraud conviction.
Summary of news:
- Securities fraud charges against former TV financial analyst
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