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Judge Sends Butowsky’s $100 Million Suit Against Charles Schwab into Arbitration

March 11, 2019

A federal judge in Texas has sent a $100 million defamation suit brought by a financial advisor with ties to President Donald Trump to arbitration, according to news reports.

Ed Butowsky sued Charles Schwab & Co. last April alleging the firm defamed him and his firm, Chapwood Capital Investment Management, and kicked him off its platform over his political views.

His termination from Schwab had allegedly followed a news story accusing Butowsky of playing a role in a bogus Fox News story, which has since been retracted, linking the 2016 murder of Democratic aide Seth Rich to leaked documents from the Democratic National Committee. Butowsky alleged that Chapwood lost 268 customer accounts and $45 million in assets under management because of Schwab’s actions.

Last week, U.S. District Judge Amos Mazzant III agreed to send the suit to arbitration, as proposed by both parties in October, Law360.com writes. Butowsky is moving forward with arbitration against Charles Schwab’s investment banking and securities firm, the firm’s president and CEO Walter Bettinger II and managing director Kevin Lewis, according to the legal news website.

Butowsky agreed to drop several Schwab executives as well as Charles Schwab Corp. and Schwab Institutional Enterprise, the firm’s broker support service, from the arbitration, Law360.com writes.

"I cannot wait for the arbitration process to begin," Butowsky tells the website.

Butowsky himself had been the target of a lawsuit linked to the Rich murder.

Last summer a federal judge in New York dismissed a defamation suit against Butowsky and Fox News brought by Rich’s parents.

That suit alleged emotional distress caused by the alleged fabrication of a story that fingered Rich as the leak.

Ed Butowsky

At the time, Butowsky vowed vengeance against “anybody who did anything negative to me as a result of the lawsuit,” he told InvestmentNews. And in 2017, Butowsky was sued by private investigator Rod Wheeler alleging the financial advisor had helped defame him by backing a Fox news story, according to Law360.com.

That suit has been dismissed for failure to state a claim, according to the website.

By Alex Padalka
  • To read the Law360 article cited in this story, click here.