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Broker made millions off of elderly in Ponzi scheme says SEC and FINRA

On Behalf of | Nov 20, 2020 | FINRA, Firm News, Ponzi |

Broker made millions off of elderly in Ponzi scheme says SEC and FINRA

A former broker accused of running a Ponzi scheme targeting elderly investors is banned from the securities industry by the U.S. Securities and Exchange Commission.

James Booth of Norwalk, Connecticut was arrested on September 30, 2019 after the U.S. Department of Justice and the SEC said he raised approximately $4.9 million from nearly 40 investors. One of the investors was an elderly widow who moved money she received from her late husband’s pension, on Booth’s recommendation. Booth told the woman she would get $1 million in return by her 100 birthday. The widow invested more than $600,000 into Booth’s recommended account.

The SEC and DOJ say Booth convinced another investor to put his money into a product that Booth said “would never lose its principal and would grow with the market.” The man invested at least $60,000 he had set aside for his child’s college. Booth did not provide the man with documentation of his investment and did not allow him to redeem it.

A third victim was convinced to give Booth $18,000, believing the money would be used to take care of the investor’s disabled sibling. Authorities do not detail what became of the $18,000.

Investigators say Booth treated other investors in a similar manner, providing people with false account statements that said Booth invested their money in the securities he said he bought. “Booth 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” federal investigators said.

For his activities, Booth is charged with one count of wire fraud and one count of investment adviser fraud. The charges carry a maximum sentence of 20 years and five years in prison, respectively. The Financial Industry Regulatory Authority reports Booth pleaded to one count of securities fraud on October 22, 2019 in U.S. District Court in the Southern District of New York.

Based on these allegations, FINRA is barring Booth from acting as a broker or working with any broker firm starting November 1, 2019. The bar is indefinite.

The Spencer Law Firm’s attorneys assist in securities related proceedings such as FINRA and SEC enforcement proceedings, arbitration and general regulatory actions. The Spencer Law Firm assists individual investors and those who have securities claims brought against them by investors, FINRA or the SEC in litigation. If you have any questions regarding securities matters, please feel free to call Bonnie Spencer at the Spencer Law Firm at (888)237-459 to see what we can do for you. You can also visit us at Spencer-Law.com or at our office at 4635 Southwest Freeway, Suite 900, Houston, Texas, 77027.