Articles Posted in James Booth

Stoltmann Law Offices, P.C. continues to investigate investor claims and reports involving former Invest and LPL Financial  registered representative James T. Booth, of Norwalk, Connecticut, who was indicted on charges of securities fraud, wire fraud, and investment advisory fraud on September 30, 2019.  According to the unsealed indictment, Booth is alleged to have executed a Ponzi scheme which effectively converted almost $5 million from forty clients. The unsealed indictment was filed in the United States District Court for the Southern District of New York, Case No. 19-CRIM-699, and can be viewed here. Although Booth operated his own company called Booth Financial Associates, he was at all time relevant to this scheme a licensed and registered representative with FINRA member brokerage firms Invest Financial Corporation and LPL Financial.

As we previously discussed on this blog, James Booth was  terminated from LPL Financial on June 26, 2019 for allegedly converting $1 million from his clients. On July 1, 2019, Booth consented to a lifetime ban from the securities industry after FINRA investigated information provided to it by LPL established that Booth converted – or stole – $1 million from clients by depositing the funds into personal accounts for his own use. According to the FINRA Acceptance Waiver and Consent (AWC), Booth committed these alleged acts from approximately April 2014 to May 2019. Looking back, it appears that both LPL and FINRA underestimated the scope of this scam because the SDNY now alleges that Booth stole $4.9 million.

According to FINRA, numerous clients have filed complaints against Invest and LPL Financial to recover funds stolen by Booth. Some of these complaints have already been settled with full recoveries. FINRA Rules and securities industry regulations require brokerage firms like Invest Financial and LPL Financial to supervise their financial advisors. The foundation for this obligation to supervise to found in the Securities Exchange Act of 1934 which states:

Stoltmann Law Offices, P.C. is investigating recent reports that James T. Booth, of Norwalk, Connecticut, was terminated from LPL Financial on June 26, 2019 for stealing upwards of $1 million from his clients. On July 1, 2019, Booth consented to a lifetime ban from the securities industry after FINRA investigated information provided to it by LPL established that Booth converted – or stole – $1 million from clients by depositing the funds into personal accounts for his own use. According to the FINRA Acceptance Waiver and Consent (AWC), Booth committed these egregious acts from approximately April 2014 to May 2019. If you or someone you know was victimized by Booth, you should contact Stoltmann Law Offices to discuss your legal options.

According to FINRA, Booth’s spree occurred while he was registered with Invest Financial Corporation and then LPL Financial. Depending on when an investor’s funds were actually converted by Booth, either Investment Financial or LPL Financial could be held responsible for this misconduct. In almost every case where a financial advisor like Booth converts or steals client money, there are various red flags and compliance failures that facilitate the theft. For example, in some cases, financial advisors will arrange for transfers of funds from a client account to a third party account, like an LLC or some outside business, from which the advisor then steals the money. In other cases, the advisor asks the clients to write a check or wire funds to either the advisor to a company he owns. In any instance, the brokerage firm’s knowledge of what their agent is up to is a phone call away. Part of a compliance department’s responsibility to supervise their agents includes making contact with clients directly to make sure they are satisfied with how their accounts are being managed and to inquire with them about their experience. It does not take a brilliant compliance examiner to figure out that a broker has been stealing money from clients for upwards of five years, like Booth.

FINRA Rules and securities industry regulations require brokerage firms like Invest Financial and LPL Financial to supervise their financial advisors. The foundation for this obligation to supervise to found in the Securities Exchange Act of 1934 which states:

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