Arcadia Man Charged with Securities Fraud for Stealing Client Funds and Concealing His Investment Firm’s Massive Financial Losses | Department of Justice

In late 2020, McDonald lost tens of millions of dollars of Hercules client money after adopting a risky short position that effectively bet against the health of the United States economy in the aftermath of the U.S. presidential election. McDonald projected that the COVID-19 pandemic and the election would result in major selloffs that would cause the stock market to drop. When the market decline didn’t occur, Hercules clients lost between $30 million and $40 million, according to the affidavit. By December 2020, Hercules clients were complaining to company employees about the losses in their accounts.

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The United States Securities and Exchange Commission subpoenaed McDonald to testify before it in November 2021, but – without advance notice – he failed to appear as required. According to the complaint, McDonald also appears to have terminated his previous phone and email accounts and told one person that he planned to “vanish.”

Anyone with information about McDonald’s whereabouts is encouraged to call the FBI’s Los Angeles Field Office at (310) 477-6565.

Source: Arcadia Man Charged with Securities Fraud for Stealing Client Funds and Concealing His Investment Firm’s Massive Financial Losses | USAO-CDCA | Department of Justice