Former LPL Financial broker James T. Booth pleaded guilty to one count of securities fraud in connection with his years-long scheme to defraud his customers of nearly $5 million.
[
More:
Finra bars broker accused of stealing $1 million from clients]
"Mr. Booth bilked some 40 clients of nearly $5 million by convincing them that he would deliver solid and secure returns on their investments," said U.S. Attorney Geoffrey S. Berman. "Instead, he delivered lies and deceit; now he faces a prison term for his lies."
Securities fraud carries a maximum sentence of 20 years in prison. Any sentencing will be determined by U.S. District Judge John G. Koeltl of the Southern District of New York. Sentencing is scheduled for Feb. 21.
According to the allegations contained in the indictment, from 2013 through 2019, Mr. Booth solicited money from clients of his Booth Financial Associates in Norwalk, Conn., and falsely promised to invest their money in securities offered outside of their ordinary advisory and brokerage accounts. Specifically, he directed certain of his clients to write checks or wire money to an entity named Insurance Trends, Inc.
[
Recommended video: Race is on to boost diversity of the advice business]
Instead of investing his clients' funds, Mr. Booth, who controlled the bank account of Insurance Trends, subsequently misappropriated his clients' funds to pay his personal and business expenses. He further concealed the truth from investors by using money obtained from new investors to make redemption payments to previous investors, in a Ponzi-like fashion.
LPL discharged Mr. Booth in May and he was barred by the Financial Industry Regulatory Authority Inc. on July 1.
Register today for our Future of Financial Advice event on Nov. 20.
