Former CNBC pundit James McDonald has been charged with fraud

A financial adviser who appeared frequently on CNBC is being sought 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 US Attorney’s office said in a statement.

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 following the presidential election, prosecutors allege.

“McDonald’s planned that the COVID-19 pandemic and the election would result in large selloffs that would cause the stock market to decline,” the US Attorney’s office said in its release.