James T. Booth, a former LPL Financial broker, has been arrested and charged by U.S. authorities with securities and wire fraud in connection with his alleged operation of a Ponzi scheme. The scheme allegedly defrauded more than three dozen retail investors, including senior citizens saving for retirement, of nearly $4 million in assets.
According to the indictment, accessible here u.s._v._james_booth_indictment, Booth, 74, solicited money from over 40 clients of his wealth management business known as Booth Financial and falsely promised to invest their money in securities offered outside of their ordinary advisory and brokerage accounts. The indictment alleges that, rather than investing the funds as represented, Booth instead misappropriated nearly $5 million to pay his own personal and business expenses. According to the indictment, from 2013 through 2019, Booth purportedly directed some of his clients to write checks or wire money to an entity named “Insurance Trends, Inc.” Booth then allegedly used the funds to pay personal and business expenses.
Under the federal indictment, Booth, of Norwalk, Connecticut, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison, one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of investment adviser fraud, which carries a maximum sentence of five years in prison, according to the Department of Justice press announcement.
According to his FINRA broker report, Booth was a registered representative with LPL Financial in Norwalk, CT from February 2018 until June 2019 he was reportedly dismissed after he “admitted to course of conduct beginning while associated with previous member firm involving the misappropriation of client funds for his personal and business use.” Prior to his registration with LPL, Booth was reportedly affiliated with the now-defunct brokerage firm Invest Financial Corp. in Norwalk, Connecticut for thirteen years.
In May 2019, FINRA reportedly began an investigation after receiving information from LPL following an internal investigation of Booth. FINRA later barred Booth from working in the securities industry. Specifically, the FINRA sanction stated that James Booth “consented to the sanction and to the entry of findings that he converted funds, totaling at least approximately $1,000,000 that multiple customers of his gave him to invest on their behalf, he however deposited the funds into an account he controlled and, used them for his own personal use.”
NASD Rule 3010 and FINRA Rule 3110 also require brokerage firms to have a system in place to supervise the sales activities of their Registered Representatives. These industry rules require that each member ensure that transactions with customers are reviewed and in certain instances approved by a Supervisor/Principal of the member. Brokerage firms may be held liable by customers for failures to supervise that result in customer losses due to broker misconduct.
The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors in connection with claims against brokerage firms and investment advisors, including fraud cases and matters involving Ponzi schemes. Investors may contact us via the contact form on this website, by telephone at (866) 966-9598, or by e-mail at email@example.com for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).