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Barred Former LPL Financial LLC Broker James Booth Faces 36 Customer Complaints for Alleged Ponzi Scheme

Posted on Tuesday, October 1st, 2019 at 2:21 pm    

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Were you the victim of former LPL Financial LLC broker James Booth (CRD# 1906145)? It is alleged that Booth stole funds from several customers during a five-year period through May 2019.

Booth was registered with LPL Financial LLC in Norwalk, Connecticut from February 2018 to June 2019, when he was terminated regarding, “Recently hired independent contractor representative admitted to course of conduct beginning while associated with previous member firm involving the misappropriation of client funds for his personal and business use.” Previously, Booth was registered with Invest Financial Corporation in Norwalk, Connecticut from 2005 to 2018. 

In February 2020, the Banking Commissioner of the state of Connecticut “issued an Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine, Notice of Intent to Revoke Registration as a Broker-dealer Agent and Investment Adviser Agent and Notice of Right to Hearing (Docket No. CDFR-20-8535-S) against James Thomas Booth of Norwalk, Connecticut. Also named in the action was Insurance Trends, Inc., an entity controlled by Booth. Most recently and from 2018 to 2019, Respondent Booth had been registered as a broker-dealer agent and investment adviser agent of LPL Financial LLC in Connecticut. While those registrations had previously been withdrawn, Connecticut law permits the Commissioner to initiate revocation proceedings within one year after the withdrawal becomes effective. The action alleged that, from 2013 to 2019, Booth violated the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act and engaged in dishonest or unethical practices while associated with his past two employing firms. More specifically, respondent Booth allegedly solicited firm clients to invest in outside opportunities and send their funds to Insurance Trends, Inc. The action also alleged that respondent Booth then used investor funds for his personal expenses and that he fabricated client account statements to reflect investments that were, in fact, never made. Booth allegedly misappropriated approximately $5 million in investor funds.” Booth was sanctioned to a $100,000 civil and administrative penalty and fine. In June 2020, the commissioner revoked Booth’s registration. 

In November 2019, Booth was barred by the Securities and Exchange Commission (SEC). In October 2019, Booth pleaded guilty to one count of securities fraud related to participating in any offering of a penny stock.

In September 2019, the SEC filed a complaint against Booth alleging that he conducted a multi-year scheme that defrauded approximately 40 investors out of nearly $4 million. According to Booth’s BrokerCheck profile, “Booth Booth made false or misleading statements to retail investors, telling them their assets would be used to purchase securities. Instead, Booth pocketed the investors’ money, using the investors’ money to pay personal and business expenses and, from time to time, to pay prior investors in order to keep the scheme going. Many of Booth’s clients and customers were unsophisticated investors, including seniors who utilized Booth’s services for their retirement savings. In furtherance of the scheme, Booth fabricated elaborate account statements, which were provided to the investors. The fabricated account statements reflected various ownership positions, transactions and earnings, all to create the false appearance that the investors’ money had been invested as promised; some statements even included fictitious securities and values. When investors requested withdrawals, Booth routinely used assets fraudulently acquired from other investors to cover those withdrawals.”

In July 2019, FINRA barred Booth after he consented to the sanction and to the entry of findings that he converted funds, totaling at least approximately $1 million 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.

Booth has been the subject of 36 customer complaints between 2004 and 2020, two of which were  closed without action, one was withdrawn, and one was denied, according to his CRD report:

April 2020. “Clients allege misappropriated funds.” The case is currently pending. 

December 2019. “4.Claimants alleges 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.” The case is currently pending. 

November 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.” The case was settled for $120,000.

November 2019. “Claimant alleges that over several years Booth converted his funds to support a Ponzi scheme using multiple shell companies, which claimant only later discovered in June 2019.” The case was settled for $35,000.

October 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.” The case is currently pending. 

October 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.” The case was settled for $225,000.

September 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.” The case is currently pending. 

September 2019. “Claimant alleges that over several years Booth converted his funds to support a Ponzi scheme using multiple shell companies, which claimant only later discovered in June 2019.” The case is currently pending. 

September 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.” The case is currently pending. 

September 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.” The case is currently pending. 

September 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.” The case was settled for $83,428.87.

September 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.” The case was settled for $100,000.

August 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.” The case is currently pending. 

August 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.” The case is currently pending. 

August 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.” The case was settled for $170,000.

August 2019. “Claimant alleges that Booth converted his funds to support a Ponzi scheme using multiple shell companies, which claimant only later discovered in June 2019.” The case is currently pending. 

August 2019. “Claimants allege that Booth converted their funds to support a Ponzi scheme using multiple shell companies, which claimants only later discovered in June 2019.” The case was settled for $250,000.

August 2019. “Claimants allege that Booth converted their funds to support a Ponzi scheme using multiple shell companies, which claimants only later discovered in June 2019.” The case was settled for $250,000.

August 2019. “Claimant alleges that Booth misappropriated funds by depositing her funds into an account for an entity that Booth controlled, which claimant only later discovered in June 2019.” The case was settled for $96,000.

August 2019. “Firm first became aware when SEC subpoena firm for information on August 1, 2019. Claimant alleges that Booth converted his funds to support a Ponzi scheme using multiple shell companies, which claimant only later discovered in June 2019.” The case is currently pending. 

July 2019. “Claimants allege that over a period of several years, Booth misappropriated funds by depositing claimants’ funds into accounts for several entities that Booth controlled, which claimants only later discovered in June 2019.” The case is currently pending. 

July 2019. “Claimants allege that over a period of several years, Booth misappropriated funds by depositing claimants’ funds into accounts for several entities that Booth controlled, which claimants only later discovered in June 2019.” The case was settled for $206,719.18.

July 2019.  “Claimants allege that over a period of several years, Booth misappropriated funds by depositing claimants’ funds into accounts for several entities that Booth controlled, which claimants only later discovered in June 2019.” The case was settled for $537,963.08.

July 2019. “Customers allege that over a period of several years, Booth misappropriated funds by requesting the customers to write checks out of their brokerage accounts payable to an entity which Booth controlled, which customers only later discovered in June 2019.” The case was settled for $577,000.

July 2019. “Customer alleges that between April 2018 and January 2019 advisor solicited customer to write personal checks and also misappropriated funds from customer’s brokerage account payable to an entity that advisor controlled.” The customer sought $180,000 in damages and the case was settled for $192,061.67.

July 2019. “Customer alleges that in December 2018 Booth solicited her to write a check payable to a company controlled by Booth.” The customer sought $28,500 in damages and the case was settled for $27,970.

July 2019. “Customer alleges that in May 2019 Booth solicited her to write a check payable to a company controlled by Booth.” The case was settled for $45,000.

July 2019. “Customers allege that during an unstated time period, Booth misappropriated funds by convincing the customers to invest in a shell company under his control.” The case was settled for $490,000.

July 2019. “Customer alleges that in May 2019 Booth solicited him to write a check payable to a company controlled by Booth.” The case was settled for $18,000.

July 2019. “Customer alleges that between August 2018 and May 2019, Booth caused checks to be issued from his brokerage account payable to an entity that Booth controlled.” The customer sought $50,651 in damages and the case was settled for $50,651.

June 2019. “Customer alleges that sometime after 2009, Booth misappropriated funds by convincing the customer to invest in a shell company under his control, which she only later discovered in June 2019.” The case was settled for $1,206,652.82.

June 2019. “Customer’s allege failure to follow trade instructions, which resulted in a loss.” The case was settled for $8,559.32.

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Invest Financial Corporation may be liable for investment or other losses suffered by Booth’s customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.