LPL’s James Booth Indicted on Charges of Securities Fraud, Investment Advisor Fraud

On September 30, 2019, financial advisor and securities broker James Booth (CRD#: 1906145, Norwalk, Connecticut) was indicted on charges of securities fraud, investment advisor fraud and wire fraud. Allegedly, Booth, 74, who has been arrested and is in federal custody, deceptively obtained up to $5,000,000 from clients of financial services firm, Booth Financial, and brokerage firm, LPL Financial. Here’s more on the allegations against James Booth:

Indictment Alleges James Booth Made False Promises To Investors When Soliciting Funds

From 2013 to 2019, James Booth solicited Booth Financial clients’ funds for private investments, according to the indictment. United States Attorney for Southern District of New York, Geoffrey S. Berman, claims that Booth convinced his clients that he would get them secure and solid returns on their investments. Apparently that was one big lie.

James Booth allegedly instructed people to transfer money to a company called Insurance Trends, Inc. Supposedly, Booth operated Insurance Trends. The indictment alleged that Booth proceeded to misappropriate their funds to pay his business expenses and personal expenses. The indictment indicates that approximately 40 investors fell victim to the schemes by relying on Booth’s false assurances of both safety and flashy returns.

Booth Allegedly Misappropriated Elderly Widow’s Pension Funds

The indictment provides examples of three investors seemingly harmed by James Booth’s scheme. First, Booth supposedly brainwashed a widow to invest in private securities with $600,000 she received from her deceased husband’s pension. The indictment alleged that Booth told the client that her investments would be worth $1,000,000 when the client turned 100.

Not only that, but James Booth allegedly convinced a different investor that the private investments Booth solicited would have market-based growth and absolute principal protection. Supposedly, after making a $60,000 investment, that client never received any documents and Booth denied the client’s redemption request. Moreover, the indictment stated that a client lured by Booth’s false representations gave him $18,000 that was previously held in an annuity for the client’s disabled sibling.

James Booth Supposedly Gave Fabricated Statements To Clients

The indictment also alleged that James Booth gave clients false account statements which appeared to reflect their investments and comport with Booth’s representations. Allegedly, Booth convinced clients to believe that their investments profited. But that’s not all. Booth supposedly used new investor money to honor redemptions from other investors in a “Ponzi-like fashion.”

The securities fraud and wire fraud counts each carry maximum 20 year prison sentences, while the investment advisor fraud count carries a 5 year prison sentence. This matter is underway.

SEC’s Complaint Alleges Booth Deceived His Clients

Federal prosecutors aren’t the only ones going after James Booth. Indeed, the United States Securities and Exchange Commission brought a Complaint dated September 30, 2019 containing substantially similar allegations against Booth. The Complaint charges Booth with violating anti-fraud provisions of Securities Exchange Act of 1934, Securities Act of 1933 and Investment Advisers Act. SEC seeks a permanent injunction against Booth and for him to disgorge ill-gotten gains and pay a civil penalty.

SEC’s Complaint indicates that James Booth not only solicited private investments from Booth Financial clients but also from LPL Financial clients. Notably, the Complaint alleged Booth’s admission to LPL Financial of stealing clients’ money. Booth appears to admit here that he engaged in a Ponzi scheme and stole millions from investors. Not only that, but Booth seemingly gave LPL Financial the statements he fabricated about investments. For this reason, LPL Financial promptly disaffiliated with Booth.

FINRA Bars James Booth For Alleged Conversion

Self-regulatory body, Financial Industry Regulatory Authority, also barred James Booth for violating FINRA rules by converting money from clients. Booth executed a Letter of Acceptance, Waiver and Consent which became effective in July. This AWC contains FINRA’s findings of Booth converting $1,000,000 from investors. It appears that the allegations relate to the same matter pursued by SEC and the Untied States Attorney’s Office. FINRA reports that nearly 25 investors brought complaints or arbitration claims alleging Booth’s conversion or misappropriation. So far, 4 disputes settled through payments of approximately $150,000 to clients; the remainder await resolutions.

Lars Soreide Highest Ethical Standard Award 2018

Lars Soreide Highest Ethical Standard Award 2018

Have you experienced losses by investing with financial advisor and securities broker James Booth? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The law firm has recovered millions of dollars for clients who have suffered losses due to misconduct of brokers and brokerage firms.