James Booth: Norwalk Advisor Charged With $4.9mm Ponzi Scheme

The US Department of Justice has announced fraud charges against former Norwalk, Connecticut financial advisor James Booth. Formerly a representative of LPL Financial and Booth Financial Associates, Booth has been charged with the operation of a “multimillion-dollar Ponzi scheme,” according to an indictment unsealed on September 30, 2019.

According to the indictment, James Booth engaged in a scheme from 2013 until 2019 in which he solicited his clients’ funds and “falsely promised to invest their money in securities offered outside of their ordinary advisory and brokerage accounts.” He instructed some customers either to write checks or wire money to “Insurance Trends,” whose bank account was under Booth’s control and from which he “misappropriated his clients’ funds to pay his personal and businesses expenses,” according to the charges.

Booth allegedly raised a total of about $4.9 million from about 40 investors, the charges state, attracting many of them “with false promises of safe investments with high returns.” Among the alleged victims described by the indictment are “a recently widowed elderly investor” whom Booth persuaded to transfer funds from her late spouse’s pension into Insurance Trends, and who ultimately invested more than than $600,000; an investor whom he allegedly persuaded to invest funds “set aside for his child’s college expenses” by falsely representing that the investment “would never lose its principal”; and another elderly customer whom Booth persuaded to “withdraw money from an annuity established for the care of his disabled sibling.”

The charges go on to state that Booth gave his investors falsified account statements that erroneously showed he “had purchased certain securities on their behalf and that those investments had generated a profit,” and that he went so far as to use money from new investors to repay previous investors “in a Ponzi-like fashion.” He has been charged with one count of wire fraud, one count of securities fraud, and one count of investment adviser fraud in the case, which remains pending. A release published by the Department of Justice emphasizes that these charges “are merely accusations, and the defendant is presumed innocent unless and until proven guilty.”

According to James Booth’s BrokerCheck report, he was barred by the Financial Industry Regulatory Authority in July 2019 over allegations he converted approximately $1 million in customer funds for his own personal use. His FINRA records also list five customer complaints against him that reached settlements. A July 2019 complaint, for instance, alleged that he solicited the customer to write a check payable to a company under his control; it reached a settlement of $45,000. Another July 2018 complaint alleged that he “caused checks to be issued from his brokerage account payable to an entity that Booth controlled”; it reached a settlement of $50,651.

James Booth is currently not registered as a broker or investment advisor. His employment history includes LPL Financial in Norwalk, Connecticut; Invest Financial Corporation in Norwalk, Connecticut; Cadaret Grant & Company in Norwalk, Connecticut; Guardian Investor Services in New York, New York; Reliastar Financial Marketing Corporation in Seattle, Washington; and One Wall Street Brokerage. He currently holds zero state licenses and has passed seven securities industry qualification examinations.