James Booth, former LPL Financial Broker, Charged by SEC with Operating Ponzi Scheme

James Booth allegedly defrauded retail investors resulting in nearly $5 million in losses.

This story was last updated on October 25, 2019 after Booth pleaded guilty to one count of securities fraud.

The Sonn Law Group is investigating allegations that James Booth was operating a Ponzi scheme. If you suffered losses investing with former LPL broker James Booth you may have options for recovery. Contact Sonn Law today by filling out our form to submit a confidential message, or call us anytime at 866–827–3202 to for a free consultation with attorney Jeff Sonn.

Overview

James Thomas Booth (CRD# 1906145) is a previously registered broker and investment advisor. From 2018 to 2019, Mr. Booth was a registered representative with LPL Financial based in Norwalk, Connecticut. Mr. Booth was discharged from his position with LPL in March 2019 following allegations that he misappropriated client funds.

Following a FINRA investigation, the regulator barred Mr. Booth from the securities industry after it was discovered that he was taking and using investors’ funds for his own personal use (Letter of Acceptance, Waiver and Consent №2019062787101).

Booth Pleads Guilty to One Count of Securities Fraud

James T. Booth, former LPL Financial advisor who was indicted in September on charges of securities fraud, investment advisor fraud, and wire fraud, has pleaded guilty to one count of securities fraud.

“Mr. Booth bilked some 40 clients of nearly $5 million by convincing them that he would deliver solid and secure returns on their investments. Instead, he delivered lies and deceit; now he faces a prison term for his lies.” — U.S. Attorney Geoffrey S. Berman

Booth Indicted on Charges of Securities Fraud, Investment Advisor Fraud, and Wire Fraud

Booth, who has been arrested and is in federal custody, deceptively obtained up to $5 million from clients of Booth Financial. He was indicted on September 30, 2019 on charges of securities fraud, investment advisor fraud, and wire fraud.

Geoffrey S. Berman, Manhattan U.S. Attorney, stated, “[a]s alleged, James Booth convinced his clients that he would deliver solid and secure returns on their investments. Instead, as alleged, Booth delivered only lies and deceit, and bilked some 40 clients of nearly $5 million. Booth is now in federal custody and will have to answer for his alleged crimes.”

As alleged in the Indictment,

From 2013 through 2019, Booth solicited money from clients of Booth Financial and falsely promised to invest their money in securities offered outside of their ordinary advisory and brokerage accounts. Specifically, Booth directed certain of his clients to write checks or wire money to an entity named “Insurance Trends, Inc.” Instead of investing his clients’ funds, Booth, who controlled the bank account of Insurance Trends, Inc., subsequently misappropriated his clients’ funds to pay his personal and business expenses.

In total, Booth raised approximately $4.9 million from approximately 40 investors. Booth lured many of his victims with false promises of safe investments with high returns. For example:

– Booth convinced a recently widowed elderly investor (“Investor-1”) to move money she had received from her late husband’s pension into Insurance Trends, Inc. Booth falsely promised Investor-1 that she would have $1 million by the time she was 100 years old. As a result of Booth’s false assurances, Investor-1 invested more than $600,000 with Booth.

– Booth similarly convinced another investor (“Investor-2”) to move his money into an investment product that, according to Booth, would never lose its principal and would grow with the market. Based on this false representation, Investor-2 moved money he had set aside for his child’s college expenses, at least approximately $60,000, to Booth. Booth subsequently failed to provide Investor-2 with documentation of his investment or to allow Investor-2 to redeem his investment.

– Booth convinced another elderly investor (“Investor-3”) to withdraw money from an annuity established for the care of his disabled sibling, approximately $18,000, and invest that money with Booth. Investor-3 gave the money to Booth with the understanding that Boothwould invest that money for the benefit of Investor-3’s sibling’s continued care.

James Booth Charged by SEC

On September 30, 2019 the SEC filed a complaint alleging that from August 2014 to June 2019, Booth made false promises of safer investments and higher returns to convince investors to move assets out of their ordinary accounts.

Instead of purchasing securities, the SEC alleges that Booth deposited the funds into an entity’s bank account which he controlled. Booth then transferred the funds into his own personal accounts and used them for personal expenses, including food, entertainment, and gambling.

According to the complaint, Booth gave his clients fake account statements reflecting securities that he purportedly purchased for them, many of which showed gains over time from the fake investments. The complaint also alleges that when investors asked to redeem their investments, Booth used assets from new investors to pay back old investors.

Along with the charges brought by the SEC, the U.S. Attorney’s Office for the Southern District of New York is also bringing criminal charges against Booth.

Booth Faces 23 Customer Complaints Stemming from Alleged Ponzi Scheme

According to his profile on FINRA’s BrokerCheck Booth has been the subject of 23 customer complaints in 2019 alone, including 5 customer disputes in September 2019, 8 in August, 10 in July, and 2 in June. All of the most recent complaints deal with Booth’s alleged Ponzi scheme operation:

9/13/2019 — Claimant alleges that over several years Booth converted her funds to support a Ponzi scheme using multiple shell companies, which claimant only later discovered in June 2019.

9/11/2019 — Claimants allege that Booth converted their funds to support a Ponzi scheme where he used multiple shell companies. Claimants discovered the alleged misconduct in June 2019.

9/09/2019 — Claimant alleges that over several years Booth converted her funds to support a Ponzi scheme using multiple shell companies, which claimant only later discovered in June 2019.

9/05/2019 — Claimants allege that over several years Booth converted their funds to support a Ponzi scheme using multiple shell companies, which claimants only later discovered in June 2019.

Prior to his registration with LPL Financial, Mr. Booth was a registered representative with several firms dating back to 1989, including most recently Invest Financial Corporation from 2005 to 2018.

Mr. Booth is one of several LPL Financial brokers hit with regulatory action this year.

Sonn Law Group has a great deal of experience in representing investors who have sustained losses due to Ponzi schemes. Founding attorney Jeffrey R. Sonn is a securities fraud lawyer with more than three decades of successful experience representing investors nationwide. He has helped to recover more than $250 million in assets lost to investment fraud, securities fraud, Ponzi schemes, and stockbroker misconduct. If you suffered investment losses resulting from an illegal Ponzi scheme, Mr. Sonn can help. Contact our law firm online or call 866–827–3202 for a free case evaluation.