Joseph R. Butler, a former Registered Representative with Woodbury Financial Services, Inc. (Woodbury Financial) was permanently barred by the Financial Industry Regulatory Authority (FINRA) for taking advantage of an elderly, dementia suffering customer’s bank accounts, converting her money for his own use, and naming himself as her annuity’s beneficiary, falsely representing that he was her son.
In its investigation, FINRA states that Mr. Butler admitted that his 75 year old, widowed customer who suffered from dementia was dependent on him and trusted him to take care of her. Mr. Butler was added to the elderly customer’s accounts after observing that her mental faculties were declining. It was then that Mr. Butler began withdrawing money from her accounts. According to FINRA’s findings, between September 2009 and December 2010, Mr. Butler wrote nine checks from his customer’s accounts totaling $105,646.158. Eight of the nine checks were made payable to himself or cash, and the ninth check he used to pay his Federal income taxes. FINRA goes on to state that Mr. Butler arranged to have the customer’s account statements delivered to his home address rather than hers and, in the same month, wired $5,000 from her accounts to his own, claiming that it was a “test,” according to FINRA. Further, Mr. Butler sent a change request form for his customer’s $453,000 annuity in which he removed the granddaughters as beneficiaries and named himself, falsely representing on the form that his relationship to the customer was “son.”
Joseph Butler, of Brandywine, Maryland, was barred from association with any FINRA member and ordered to pay $170,408.18, plus interest, in restitution to his former customer. This decision was upheld by the Securities and Exchange Commission (SEC) following appeal of a National Adjudicatory Council (NAC) decision.
Stock brokerage firms have a duty to supervise their employees. They are required to have policies and procedures in place that will safeguard the funds and securities of customer accounts. Broker-dealers must establish and implement a reasonable supervisory system to protect customers from all types of broker misconduct—not only fraudulent theft and conversion. If broker-dealers do not establish and implement these protective measures, they may be liable to investors for damages flowing from the misconduct. Therefore, investors who have suffered losses due to theft, misappropriation and other misconduct by their broker can bring forth claims to recover damages against broker-dealers like Woodbury Financial Services, which has a duty to supervise its employees in order to prevent the above-described misconduct.
Have you suffered losses in your Woodbury Financial Services account due to your stockbroker’s fraud or other misconduct? Are you or someone you know being taken advantage of by an unscrupulous stockbroker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Woodbury Financial Services stockbrokers who may have engaged in misconduct and caused investors losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.