James Kenneth Couture of Worchester Massachusetts a former stockbroker of LPL Financial LLC and former investment adviser representative of Private Wealth Management Group has been charged by Securities and Exchange Commission (SEC) with taking part in a scheme to misappropriate $2,900,000.00 from investors. Civil Action No. 1:21-CV-10908 (D. Mass June 1, 2021).
According to the Complaint, between 2009 and December of 2019, while Couture was associated with Private Wealth Management Group and LPL Financial, he had his customers sell their existing investments and place funds with a company that Couture had ownership and control of. The Complaint alleges that customers did this based on Couture’s false statements to them about investing for their benefit. The regulator contends that Couture used the funds for his benefit instead. The Complaint states that customers were lulled by Couture into assuming that their money had been invested through him. Those customers purportedly received fake account statements.
SEC alleges that the stockbroker handled customer withdrawal requests by taking other customers’ assets. Couture supposedly concealed that he misappropriated customer funds since he had the funds moved through third party accounts. The stockbroker purportedly misappropriated one customer’s funds so that he could offset funds that had been stolen from another customer. The regulator alleged that $2,900,000.00 in investors’ funds were misused through Couture’s fraudulent scheme.
Couture has been charged by SEC with violating Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5, and Investment Advisers Act of 1940 Sections 206(1) and 206(2). He also faces criminal charges that have been brought by the United States Attorney’s Office in a parallel action.
Couture has also been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon findings that he failed to comply with the regulator when he was investigated for misusing customer funds and for altering customer account documents. Letter of Acceptance Waiver and Consent No. 2020067011901 (Oct. 21, 2020).
According to the AWC, Couture was asked to provide documents and information to FINRA personnel so that they could evaluate the accusations made by LPL Financial when it terminated him on July 16, 2020. The securities broker dealer discharged Couture founded on allegations of him commingling customer funds, using an unauthorized email address, and altering distributions and account balances on documents. Couture partially cooperated with FINRA before refusing to provide the remaining documents. He violated FINRA Rules 2010 and 8210 for this reason.
FINRA Public Disclosure reveals that Couture has been identified in two customer initiated investment related disputes concerning accusations of his wrongdoing at a time that he was employed by LPL Financial. On October 20, 2020, a customer filed an investment related complaint concerning Couture’s activities in which the customer requested more than $5,000.00 in damages supported by allegations that Couture misrepresented information in regard to the customer’s investments in exchange traded funds and mutual funds between April 21, 2020 and October 20, 2020.
Couture has also been referenced in a customer initiated investment related FINRA securities arbitration claim where the customer sought $385,000.00 in damages based upon accusations that money had been misused by Couture when he was the customer’s investment adviser at LPL Financial. FINRA Arbitration No. 21-01476 (June 15, 2021). The claim alleges that the customer’s funds were paid to a different customer.
Couture was associated with LPL Financial between February 27, 2009 and July 16, 2020. He was associated with Private Wealth Management Group as an investment adviser representative between December of 2010 and November of 2016.