Ex-LPL broker arrested, charged with running Ponzi scheme

James T. Booth defrauded 40 clients of $5 million, Feds allege.
OCT 02, 2019
A former LPL Financial broker, James T. Booth, was arrested Monday morning in Norwalk, Conn., for allegedly fraudulently obtaining almost $5 million from clients and using it to pay personal and business expenses. From 2013 through 2019, Mr. Booth, 74, solicited money from clients of Booth Financial and falsely promised to invest their money in securities offered outside of their ordinary advisory and brokerage accounts, the Department of Justice alleged in its indictment. [Recommended video:​ What advice industry needs to do as nation's diversity evolves] He directed certain of his clients to write checks or wire money to an entity named Insurance Trends Inc., according to the Department of Justice. 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. In total, he raised close to $4.9 million from approximately 40 investors and allegedly lured many of his victims with false promises of safe investments with high returns. In one alleged instance cited by the indictment, Mr. Booth convinced a recently widowed elderly investor to move money she had received from her late husband's pension into Insurance Trends. He allegedly promised the elderly widow that she would have $1 million by the time she was 100 years old. She then invested more than $600,000 with Mr. Booth. His attorney, Frank P. Bevilacqua, did not return a call to comment. Mr. Booth was charged on Monday in federal court in Manhattan with securities fraud, wire fraud and investment adviser fraud. The Financial Industry Regulatory Authority Inc. barred Mr. Booth in July from the securities industry. According to his BrokerCheck report, Mr. Booth was fired by LPL at the end of May. Before being registered with LPL in 2018, he had been a broker with Invest Financial Corp. since 2005. LPL bought Invest Financial and three other broker-dealers that were part of the National Planning Holdings network last year. LPL has so far settled five customer complaints involving Mr. Booth, according to BrokerCheck. There are 18 pending customer complaints against him. "Mr. Booth was terminated on May 30, 2019, after we became aware of apparent misconduct and notified the appropriate regulators and law enforcement," wrote LPL spokesman Jeff Mochal in an email. "We continue to investigate this matter internally and cooperate with ongoing investigations."

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