Adviser files motion to dismiss claim he was involved in fake news about murdered DNC staffer

Complaint alleges Ed Butowsky and Fox News 'worked in concert under the watchful eye of the White House' to concoct phony story to divert attention from Russian hacking in 2016 presidential campaign

Sep 19, 2017 @ 2:18 pm

By Bruce Kelly

Last month, outspoken financial adviser Ed Butowsky found himself at the center of a bombshell lawsuit that alleged he was directly involved in concocting a phony news story about a murdered Democratic National Committee staffer. On Monday, Mr. Butowsky formally denied those allegations, filing a motion to dismiss the claim in U.S. District Court, the Southern District of New York.

The lawsuit, filed against Mr. Butowsky, Fox News and a reporter, "is overloaded with sensationalistic allegations that have nothing whatsoever to do with this cause of action," according to Mr. Butowsky's motion. The lawsuit "fails to plausibly allege even the most basic elements of defamation."

Mr. Butowsky is the managing director of Chapwood Investments and speaks frequently at industry conferences.

The complaint, filed August 1 by Rod Wheeler, a Fox News contributor and former Washington D.C. police homicide detective, alleges defamation and characterizes Mr. Butowsky as a frequent contributor for Fox News and Fox Business Channel and an outspoken supporter of President Donald J. Trump and opponent to Hillary Clinton.

The complaint charges that the Fox News Channel and Mr. Butowsky "worked in concert under the watchful eye of the White House to concoct a story about the death of a young DNC aid" Seth Rich, who was murdered in Washington in 2016.

The Fox News reporter, Malia Zimmerman, with the knowledge and support of Mr. Butowsky, fabricated two quotes about a connection between Mr. Rich and Wikileaks as well as a DNC cover-up of the murder investigation, according to the complaint. Mr. Wheeler's suit claims he did not make those statements and they were falsely attributed to him.

Fox News aired the story in May and then retracted it a week later.

According to Mr. Butowsky's motion, Mr. Wheeler "does not allege, anywhere in his complaint, that Butowsky had any role in the sourcing, drafting, fact checking or publishing the quotes in question."

Mr. Wheeler's "failure to state that Butowsky was specifically involved in fabricating the misattributed quotes is fatal to his claim," according to the motion. "The complaint alleges generally that Butowsky was involved in Wheeler's investigation and encouraged Zimmerman's publication of the Fox News story, but those allegations are not sufficient to support a claim for defamation concerning the misattribution of Wheeler's quotes."

And Mr. Wheeler was well aware of the disputed quotes in the article, as the reporter sent him emails containing drafts of the story, according to the motion. Thus, Mr. Wheeler "not only knew about and consented to the two alleged defamatory quotes, but the communications he partially described in his complaint show that he was an active participant in their publication."

Meanwhile, Fox News on Monday sought to move the matter to arbitration, claiming its agreement with Mr. Wheeler required disputes to be handled by mediation.

But Mr. Wheeler's attorney, Michael Willemin, wrote in an email: "We will oppose Mr. Butowsky's motion to dismiss and look forward to moving this case into discovery. Fox's effort to compel this legal proceeding into a confidential arbitration process is an attempt to keep people in the dark on what now is a matter of serious public concern. We are confident that our client will ultimately be vindicated in a public court of law that will expose how Fox and the individually named defendants created fake news in an attempt at diverting attention away from the Russian hacking scandal."

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