SEC Charges Connecticut Man with Ponzi Scheme Defrauding Retail Investors

Litigation Release No. 24629 / September 30, 2019

Securities and Exchange Commission v. James T. Booth, Civil Action No. 19-cv-1535 (D. Conn. filed September 30, 2019)

The Securities and Exchange Commission today charged a Connecticut man with operating a multi-million dollar Ponzi scheme that bilked over three dozen retail investors, including senior citizens saving for retirement, of $4 million in assets.

According to the SEC's complaint, filed in federal court in Connecticut, from at least August 2014 to June 2019, James T. Booth, while operating an investment advisory and brokerage business, made false promises of safer investments and higher returns to convince investors to move assets out of their ordinary accounts. Instead of purchasing securities, Booth allegedly deposited investors' funds into a bank account of an entity he controlled, and then moved the funds into his personal accounts and used them to pay for business and personal expenses, including meals, entertainment and numerous trips to casinos. According to the complaint, Booth supplied his clients with detailed false account statements showing securities that he purportedly purchased on their behalf, many of which showed gains over time from the fictitious investments. The complaint alleges that when investors asked to redeem some or all of their investments, Booth provided investors with Ponzi-like payments, using assets from new investors to pay back old investors.

In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced criminal charges against Booth.

The SEC's complaint charges Booth with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and seeks a permanent injunction from future violations of the securities laws, disgorgement and prejudgment interest, and a civil monetary penalty.

The SEC's case is being handled by Rory Alex, Robert Baker, Jennifer Cardello, William Donahue, and Martin Healey of the SEC's Boston Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Department of Homeland Security.

The SEC's Office of Investor Education and Advocacy has issued investor guidance on how senior citizens can protect themselves from fraud.