Ex-CNBC analyst and Arcadia resident sentenced to 5 years for fraud

A former Arcadia resident who was a frequent guest on financial-television news programs then became a fugitive from justice was sentenced Monday, Aug. 4,  to five years behind bars for defrauding investors out of at least $2.7 million.

James Arthur McDonald Jr., 53, pleaded guilty in April to one federal count of securities fraud, according to the U.S. Attorney’s Office.

A restitution hearing will be held later.

McDonald has been in federal custody since June 2024, when he was arrested in Port Orchard, Washington, after being a fugitive since November 2021, when he failed to appear before the U.S. Securities and Exchange Commission to face allegations that he had defrauded investors, prosecutors said.

According to his plea deal filed in Los Angeles federal court, law enforcement who searched McDonald’s Washington state home found a fake Washington, D.C., driver’s license bearing McDonald’s photograph and the name “Brian Thomas,” among other items.

McDonald was the chief executive and chief investment officer of two companies: Hercules Investments, based in downtown Los Angeles, and Redondo Beach-based Index Strategy Advisors. He frequently appeared as an analyst on the CNBC financial-television news network, prosecutors said.

McDonald also falsely told clients that ISA, his other firm, was a registered investment adviser, even though he had withdrawn ISA as a state-registered investment adviser firm in May 2019. He sent ISA clients false account statements, including for one client who invested about $351,000 and later needed the money to make a down payment on a home. The client was informed by McDonald that much of the money had been lost, and the investor never got his full investment back, according to the U.S. Attorney’s Office.

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