Exonerated in defamation suits, Ed Butowsky is out for blood

Texas adviser embroiled in Seth Rich lawsuit says false charges cost him professionally and personally

Aug 6, 2018 @ 3:56 pm

By Jeff Benjamin

The dismissal last week of two lawsuits against Plano, Texas-based financial adviser Ed Butowsky has not yet taken the form of a warm and fuzzy feeling.

"Anybody who did anything negative to me as a result of the lawsuit will pay," Mr. Butowsky said Monday. "I'm going to sue the hell out of a lot of firms. I want to see these people choke on their nerves and go through the same crap I had to go through."

Last August, Mr. Butowsky, managing director of Chapwood Investments, was named in two high-profile lawsuits related to a since-retracted Fox News story about murdered Democratic National Committee staffer Seth Rich. The two lawsuits also named Fox News and a Fox News reporter, Malia Zimmerman. One suit was brought by Mr. Rich's parents and the other by Rod Wheeler, an investigator looking into Mr. Rich's death for his parents.

The defamation lawsuits were dismissed Thursday by U.S. District Judge George Daniels of the Southern District of New York, who cited a failure to prove statements were false or a basis for the defamation claims.

Mr. Butowsky isn't yet ready to move past the publicized allegations that he conspired with Fox News and "worked in concert under the watchful eye of the White House to concoct a story about the death of a young DNC aide."

"The story around this case had everything to do with the lawyer who filed the lawsuit," said Mr. Butowsky, referring to Doug Wigdor of the New York law firm of Wigdor, who represented Mr. Wheeler.

"Lawyers can put anything they want in a lawsuit; there's so much flexibility, it's hideous," Mr. Butowsky said. "For a year I've been known as the guy who is Trump's backer, and as someone who loves Trump and made up stories to divert attention from what really happened."

The Wigdor law firm refused to comment on the dismissal, but pointed out that it had stopped representing Mr. Wheeler on May 30. Eli J. Kay-Oliphant, an attorney at Massey & Gail who represents the Riches, did not return a call for comment.

Mr. Butowsky said he still stands by the retracted Fox News story.

"I didn't see anything wrong with [Malia Zimmerman's] article," he said. "Despite the claims, Rod Wheeler was not misquoted. The story is that Wigdor made up stuff related to Malia's story."

Mr. Butowsky said his financial planning business was negatively affected by the news reports about the lawsuit.

"We lost about a third of our business last year related to a made-up story by a greedy lawyer," he said. "I lost a lot of clients on day one. Some wouldn't even pick up the phone, and the ones that did wouldn't listen to my side of the story. And the clients that stayed with me are still skeptical."

In April, Mr. Butowsky filed a $100 million lawsuit against Charles Schwab Corp. after the custodian terminated its 12-year relationship with Chapwood, without cause, according to the lawsuit.

That lawsuit, which Mr. Butowsky said he is still pursuing, claims Schwab's "intentional wrongdoing" caused Chapwood's assets under management to decline by $45 million to less than $200 million.

The suit also claims that after being kicked off of the custodian platform, Chapwood lost "over 268 customer accounts and suffered substantial loss of income."

A Schwab spokeswoman, Mayura Hooper, wrote in an email that "Schwab has terminated its relationship with Chapwood Capital Investment under the terms of our contractual agreement, effective January 22, 2018."

"The termination was a business decision following a thorough business review of Chapwood," Ms. Hooper said. "We do not publicly discuss the details of our business reviews."

In addition to his plans for a string of lawsuits, Mr. Butowsky is preparing to go after any financial advisers who took advantage of the situation by poaching his clients.

"To those financial advisers that went after my clients, I know who they are, and I'm going to go after them and my clients," he said.

Mr. Butowsky said that in addition to the damage to his business and reputation, the defamation lawsuits took a toll on his personal life.

"I had death threats, and vandalism to my home and car," he said. "There was even a death clock on the internet counting down the days till my 20-year-old son got back to Vanderbilt, so somebody could kill him."

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