James Thomas Booth, an ex LPL Financial broker, was arrested last week in Connecticut, for running a Ponzi scheme. According to the authorities, he fraudulently obtained $4.9M from over 40 clients.
Based on the Department of Justice's discoveries, Booth solicited money from clients with the false promise of investing it in securities offered outside of their ordinary advisory and brokerage accounts. Once the money was transferred, he embezzled his clients' funds to pay his personal and business expenses.
In one alleged instance cited by the indictment, the former LPL employee convinced an older woman to invest more than $600,000 from her late husband's pension by promising to double it by the time she was 100 years old.
Former LPL Advisor Charged with Multiple Counts of Fraud
As a result of these illicit activities, Mr. Booth was charged in Manhattan's federal court with securities fraud, wire fraud, and investment adviser fraud. Furthermore, the Financial Industry Regulatory Authority Inc. (FINRA) banned Booth from the securities industry and fired by LPL after being in the firm for 13 years.
So far, LPL Financial has settled five customer complaints involving the former employee. Nonetheless, there are still eighteen other pending accusations.
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