James Booth, Formerly of LPL Financial, Pleads Guilty to Securities Fraud

Booth allegedly defrauded customers over a period of many years through misrepresentations and lies.

The Sonn Law Group is investigating allegations that James Booth committed misconduct. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.

James Booth, former financial advisor for LPL Financial, pled guilty to securities fraud in the Southern District of New York in October 2019. The charges accused Booth of securities fraud in connection with his years-long scheme to defraud customers of his financial services firm, Booth Financial Associates (“Booth Financial”), of nearly $5 million through material misrepresentations to his clients. 

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

The indictment alleged that between 2013 and 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 clients to write checks or wire money to “Insurance Trends, Inc.” Instead of investing the funds, Booth, who controlled the bank account of Insurance Trends, Inc., misappropriated the clients’ funds to pay his personal and business expenses. 

Booth allegedly convinced a widowed, elderly customer (“Investor 1”) to invest over $600,00 with Insurance Trends, some of the funds she received from her late husband’s pension. Booth falsely promised Investor 1 that she would have $1 million by the time she turned 100. 

Booth also convinced another investor (“Investor 2”) to move his money into an investment product that, “would never lose its principal and would grow with the market,” according to Booth. Based on the misrepresentation, Investor 2 transferred money from his children’s college funds, approximately $60,000, to booth. Investor 2 was never able to redeem his investment. 

Booth convinced another elderly investor (“Investor 3”) to withdraw money from an annuity that had been established for his disabled sibling’s care, totalling approximately $18,000. Investor 3 gave Booth the money under the impression it would be invested for Investor 3’s sibling’s continued care.

To prevent any of these investors from requesting a return of their money, and to induce future investments, Booth provided them with fabricated account statements that falsely indicated that Booth had purchased securities with the clients’ funds. He further concealed his misconduct from investors by using money obtained from new investors to make redemption payments to older investors in a Ponzi-like scheme.

Booth is scheduled for sentencing on February 21, 2020. He faces a maximum of 20 years in prison.

Booth is facing nearly 30 arbitration claims from former clients of LPL Financial. The clients allege that Booth used their money to “support a Ponzi scheme using multiple shell companies.”

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The Sonn Law Group is currently investigating allegations that brokers recommended unsuitable investments. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.