SEC Obtains Judgment Against Former LPL Broker that Ran $5 Million Ponzi Scheme
The Securities and Exchange Commission has obtained a final judgement against James T. Booth, a former LPL Financial broker who operated a Ponzi scheme.
The Securities and Exchange Commission has obtained a final judgement against James T. Booth, a former LPL Financial broker who operated a Ponzi scheme that defrauded roughly 40 retail investors, including senior citizens saving for retirement, out of $4 million.
Late last year, Booth pled guilty to one count of securities fraud and was sentenced in a parallel criminal action to 42 months in prison, followed by three years of supervised probation and was ordered to pay nearly $5 million in forfeiture.
On February 19, 2021, the U.S. District Court for the District of Connecticut entered a final judgment by consent against Booth in the SEC’s action, permanently enjoining him from future violations.
According to the SEC’s original complaint, from at least August 2014 to June 2019, while operating his investment advisory and brokerage business, Booth made false promises of safer investments and higher returns to convince his investment advisory clients and brokerage customers to move assets out of their ordinary accounts.
Booth spent less than one year at LPL before he was fired in May 2019 for misappropriating “multiple clients’ funds for his personal and business use,” according to his BrokerCheck profile. Prior to LPL, he spent 12 years with Invest Financial Corporation, and another 12 years at Cadaret, Grant & Co. before that.
The SEC claimed that Booth deposited investors’ funds into a bank account of an entity he controlled, and then moved the funds into his personal accounts to pay for business and personal expenses, including meals, entertainment and numerous trips to casinos.
Booth reportedly provided his clients with detailed false account statements showing securities that he “purchased on their behalf, many of which showed “gains” over time.
Booth was barred by FINRA in July 2019 and by the SEC in November 2019.
