On March 27, 2023, the U.S. District Court for the District of Massachusetts entered a final judgment against Massachusetts-based investment adviser, James K. Couture in connection with the SEC's allegations that he engaged in a deceptive scheme to misappropriate a total of approximately $2.9 million from unsuspecting clients.

The SEC's complaint filed in June 2021 charged that from approximately 2009 to December 2019, Couture, while operating an investment advisory and brokerage business, fraudulently prompted his advisory clients to sell portions of their securities holdings in order to fund large money transfers to an entity that, unbeknownst to his clients, Couture owned and controlled. According to the complaint, for each transaction, Couture obtained client authorization by falsely claiming that the proceeds would be reinvested for the clients' financial benefit. In reality, Couture's alleged purpose in arranging these transactions was to divert the sale proceeds for his own benefit. When clients requested withdrawals, the complaint alleged that Couture took assets from his other advisory clients through a web of third-party accounts to disguise that he was misappropriating money from one client to replace funds he had previously stolen from another.

Pursuant to the final judgment, to which Couture consented, Couture was permanently enjoined from future violations of the antifraud provisions of 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.

In a parallel action by the U.S. Attorney's Office for the District of Massachusetts, Couture pleaded guilty to ten criminal counts including one count of investment adviser fraud. On January 11, 2023, Couture was sentenced to 100 months in prison followed by three years of supervised release, and was ordered to pay $1,924,585 in restitution and $2,874,585 in forfeiture.

The SEC previously issued an order barring Couture from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal adviser, transfer agent, or nationally recognized statistical rating organization, as well as participating in the offering of a penny stock.

The SEC's case is being handled by Rory Alex, Robert Baker, Jennifer Cardello, William Donahue, and Richard Harper, II of the SEC's Boston Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Massachusetts, the Federal Bureau of Investigation, and the Internal Revenue Service.