James K. Couture, a former broker of LPL Financial, has been barred from the industry by the Securities and Exchange Commission (SEC) after he recently pleaded guilty to charges against him relating to a theft of $2.8 million from 6 clients. This was the second time he had pleaded guilty.
The formerly Sutton, Massachusetts-based broker was “barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization” by the SEC order. He was also barred from “participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock” by the same SEC order.
Clients of James Couture are encouraged to call our experienced investment fraud lawyers at 1-800-856-3352 for a free consultation on loss recovery.
The earlier guilty plea
According to information provided by the U.S. Justice Department, along with that available in court documents in the U.S. District Court for the District of Massachusetts, as recently as last year, Couture had pleaded guilty to one count of aggravated identity theft and three of wire fraud. Couture was to serve between 66 and 91 months in prison, as per the terms of a plea agreement.
A month later, he decided to cancel the hearing that was scheduled and scrapped the agreement. This is based on a court filing in July 2021.
June 2021 is when Couture was charged initially in connection with the scheme. It was learned from the Justice Department in September that Couture engaged in witness tampering by creating fake documents purported to be for his client’s accounts and providing false information to at least one victim in the case for approximately six months.” This transpired after initial charges had been filed.
Consequently, in early 2022, Couture was “subsequently charged with witness tampering in connection with his efforts to deceive” that victim, according to information available from the Justice Department. As a result, his prison sentence faced by him is likely to be longer.
The second guilty plea
Couture’s September guilty plea, and consequences thereof, according to the Justice Department:
Witness tampering – one count
A sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000.
Wire fraud – four counts
A sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater, for each charge.
Aggravated identity theft – four counts
A mandatory consecutive term of two years in prison for each charge.
Investment advisor fraud – one count
A sentence of up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater.
The sentencing has been scheduled at 3 PM in the U.S. District Court for the District of Massachusetts on the 11th of January 2023, by Judge Nathaniel Gorton.
Couture’s BrokerCheck profile
According to the BrokerCheck website of the Financial Industry Regulatory Authority (FINRA), Couture was associated with KLPL Financial from 2009 to 2020.
He is also the founder of The Private Wealth Management Group in 2010, which has offices in Worcester and Springfield, Massachusetts.
He has eight disclosures on his report, with most of them being client complaints regarding the misappropriation of their funds. One of them pertains to his termination by LPL in June 2020 on suspicion of altering account balances, identifying information and distributions in the statement of account of a customer, apart from maintaining customer funds that were commingled and using an email address that was unapproved.
On the 16th of October 2020, Couture signed a letter of acceptance, waiver, and consent issued by FINRA without admittance or denial of their findings from an investigation conducted into his actions. In the letter, he agreed that he would be barred from any association, in any capacity, with any member of FINRA member.
Investing in non-existing mutual funds
In their initial action, it had been highlighted by the Justice Department that Couture had also founded New Hampshire-based Legacy Financial Group around September 2009. The firm acted as the third-party administrator of the retirement plan of a Worcester-based law firm.
Couture is believed to have stolen $2.8 million from his clients’ accounts between 2009 and 2020. The theft was perpetrated by transferring money out of the account and investing in non-existent mutual funds. In order to maintain a charade of the investments generating returns, the holdings of other clients were sold.
According to the filed charges, he either forged the signature of these clients or got them to sign documents on false representations of the money being used for their benefit.
In a parallel action that the SEC filed against Couture on the same date as the initial Justice Department action, the SEC also alleged he defrauded his advisory clients.