Securities Lawyers Blog
The law offices of Gana Weinstein LLP are currently investigating claims that Broker James Couture (Couture) has been accused by investors of engaging in fraudulent misappropriation of their funds. According to records kept by The Financial Industry Regulatory Authority (FINRA), it appears that Couture was employed by LPL Financial LLC at the time of the activity. If you have been a victim of Couture’s alleged misconduct our firm may be able to assist you in recovering funds.
FINRA BrokerCheck shows a settled customer complaint on February 06, 2023.
Customer alleges misappropriation of funds between January 2011 and January 2020
FINRA BrokerCheck shows a final customer complaint on November 28, 2022.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 (‘Exchange Act’) and Section 203(f) of the Investment Advisers Act of 1940 (‘Advisers Act’) against James K. Couture (‘Respondent’). The Commission finds that on September 8, 2022, Couture entered a plea agreement with the court whereby he pleaded guilty to criminal charges, including, among others, one count of investment adviser fraud, in violation of Title 15 United States Code, Sections 80b-6 and 80b-17 before the United States District Court for the District of Massachusetts, in United States v. James Kenneth Couture, Crim. No. 21-cr-10172-NMG (D. Mass.). The indictment to which Couture pled guilty alleged, inter alia, that, from September 2009 through January 2020, Couture misappropriated approximately $2.9 million from approximately six investors. As part of a scheme, Couture advised his clients to transfer their assets to a company called Legacy Financial Group, LLC (‘Legacy’) for investment purposes, without telling the clients that Legacy was a shell company that he controlled and that did not hold or offer bona fide investment products. Couture did not invest the money his clients transferred to Legacy, as he promised them he would. Instead, he used his clients’ funds that they transferred to Legacy for other purposes, including to buy the client list of another investment adviser in or about October 2013. In order to deceive his clients about the fact that he had stolen their money, Couture created fake account statements that purported to reflect investments at Legacy in accounts and investment funds. In fact, those accounts and investments did not exist. As a further part of the scheme, when Couture’s clients requested withdrawals or transfers from their purported Legacy accounts, Couture paid them with assets he stole from other clients and disguised the payments as disbursements from profit-sharing or employee benefit plans held at a third-party benefit company.
We specialize in representing victims of fraud when financial advisors take loans from clients or facilitate securities transactions through OBAs. The practice of selling unapproved investments, promoting fraudulent schemes to hide misused funds, and engaging in other deceptive acts is known in the industry as “selling away,” a major infraction of securities laws. The term “selling away” in the industry refers to financial advisors promoting investments in businesses, promissory notes, or securities that their affiliated brokerage firm has not approved. In some cases, these investments are legitimate, but more often than not, they result in Ponzi schemes or financial advisors converting funds for personal use.
However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. To adequately supervise their brokers, firms must implement systems that track advisors’ activities and communications with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Couture has been in the securities industry for more than 18 years. Couture has been registered as a Broker with LPL Financial LLC since 2009.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.