Former Stockbroker Convicted of Theft and Securities Fraud

James A. Philbrook of New Hampshire Found Guilty of Defrauding St. Agatha Couple out of $195,000

 GARDINER — Maine Securities Administrator Judith M. Shaw and Attorney General William J. Schneider announced today that former New Hampshire stockbroker James A. Philbrook was found guilty by a jury in Aroostook County of two felony charges stemming from a 2005-2006 investment scheme that cost a St. Agatha couple nearly $200,000.

During the trial, the State presented evidence that Philbrook, who had been the couple’s financial advisor for over a decade, approached them with a scheme for developing a pay-per-view cable TV production featuring the entertainer Carmen Electra. The couple invested a total of $145,000 based on their long-standing relationship with Philbrook and his representation that their investment in the production would make a substantial return. In reality, Philbrook used nearly half of the investment to pay back money his son Stefan had embezzled from an employer, and used the rest for his own investments or expenses. The State also presented evidence that Philbrook subsequently solicited another $50,000 investment from the couple, but then spent the investors’ funds on his personal expenses.

The jury’s verdict indicates that they disbelieved Philbrook’s testimony that the funds provided by the St. Agatha couple were merely personal loans and that he could use the funds however he wished.

“We are gratified that the jury found Mr. Philbrook guilty of securities fraud and theft in this case,” commented Administrator Shaw. “Philbrook brazenly exploited the relationship of trust that he had developed with Maine investors over a period of years.”

“Mainers should be able to rely on the representations of their financial advisors and we will pursue and prosecute professionals who steal from their clients,” said Attorney General Schneider. “We will continue to work closely with the Office of Securities to ensure that investors are protected from this kind of illegal conduct.”

Philbrook is expected to be sentenced by Justice E. Allan Hunter in October. The case was investigated by Christian Caruso and Jacqueline Drouin of the Maine Office of Securities and prosecuted by Maine Assistant Attorney General Michael Colleran. The New Hampshire Bureau of Securities Regulation took administrative action against Philbrook on September 7, 2012, for the same conduct.

Consumers are encouraged to contact Maine’s Office of Securities to check an adviser, salesperson or investment, or for other information related to investing, by calling 1-877-624-8551 (TTY: Please Call Maine Relay 711), by visiting the Office’s website (www.investors.maine.gov), or by writing to Maine Office of Securities, 121 SHS, Augusta, ME 04333-0121.

 

The Office of Securities is part of Maine’s Department of Professional and Financial Regulation, which encourages sound ethical business practices through the regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can learn more about the Department online at www.maine.gov/pfr.

 

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