A $100 million defamation lawsuit that financial adviser Ed Butowsky filed against Charles Schwab & Co. is headed to arbitration.
Mr. Butowsky, managing partner of Chapwood Capital Investment Management, alleged that Schwab defamed him and his firm in August 2017 due to political reasons, causing Chapwood to lose nearly 270 customer accounts and $45 million in assets under management, or about 19% of the firm's assets at the time.
Federal judge Amos Mazzant ruled that the case should head to arbitration and that the federal civil lawsuit would be stayed pending the arbitration proceedings, according to a court document filed Wednesday in U.S. district court in Texas.
The move is just "procedural," Mr. Butowsky said, since both parties agreed to send it to arbitration.
"I can't wait to get all the facts out and begin to pursue my case," Mr. Butowsky said.
A spokesman for Charles Schwab didn't immediately return a request for comment.
The lawsuit — Chapwood Capital Investment Management and Ed Butowsky v. Charles Schwab & Co. Inc. et al — relates to Fox News' coverage of the death of former Democratic National Committee staffer Seth Rich.
Mr. Butowsky had previously been named as a co-defendant in two defamation lawsuits brought by the staffer's parents and a private investigator, who claimed Mr. Butowsky conspired with Fox News to "concoct a story" about the DNC aide's death. Those lawsuits were ultimately dismissed.
Mr. Butowsky claims Charles Schwab "blindly" accepted the defamatory statements about him, and implemented a plan to "defame Chapwood and poach its clients." The firm, Mr. Butowsky claims, did so by sending letters to Chapwood's existing and former clients that described Chapwood and management as "unethical, dishonest and untrustworthy."
Mr. Butowsky is seeking compensatory and punitive damages of at least $100 million plus 5% interest.