| Read Time: 3 minutes | Broker Misconduct | Brokerage Firms In The News |

Joseph Butler of Brandywine, Maryland was barred by the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly converting a customer’s funds for his own personal use. Mr. Butler entered the insurance industry in 1967 and in 1994 became registered with Woodbury Financial Services, Inc. (Woodbury) as an investment company and variable contracts products limited representative. In 2012, Mr. Butler was terminated after he failed to disclose he was listed as a beneficiary for multiple client banking accounts.

In August 2013 FINRA filed a complaint against Mr. Butler alleging that he converted a client’s funds for his own personal use. FINRA alleged that Mr. Butler violated Woodbury policies and took advantage of an elderly client using their funds to pay his taxes. This client was an elderly widow with diminishing mental health. Mr. Butler frequently visited this client and noticed her mental and physical health was declining and that she was not paying her bills. In 2009 Mr. Butler was added as a joint account holder to her bank accounts. On that same day, FINRA found that Mr. Butler transferred $25,000 from his clients account to his own personal account. In 2009 alone, Mr. Butler wrote a cashed three checks from his clients account.

In 2010, Mr. Butler allegedly took his client to his attorney and became her attorney-in-fact granting him the power to make health care decisions for her. In January 2011, the client was diagnosed with dementia and in May, Mr. Butler submitted a beneficiary change form labeling himself as the client’s son. According to FINRA, in 2012 Mr. Butler wrote and cashed six checks from his client’s account totaling $25,000.

The origin of this complaint is the family of Mr. Butler’s client who noticed many red flags. While Mr. Butler claimed the checks he cashed were payment for his services FINRA however believed these statements were false. Mr. Butler was ordered by FINRA to pay restitution for the three years of misappropriated funds in the amount of $170,408.18.

Stockbrokers have been known to engage in many types of practices which violate industry and firm rules, practices, and procedures.  In order to protect customers from stockbroker misconduct, FINRA rules require broker-dealers such as Woodbury Financial Services to establish and implement a reasonable supervisory system.  The implementation of the rules require supervisors to monitor employees to ensure they comply with federal and state securities laws, securities industry rules and regulations, and the firm, such as Woodbury Financial Services own policies and procedures.  If broker dealers and/or their supervisors do not establish and implement these protective measures, they may be liable to investors for damages which flow from the misconduct.  As a result, investors who have suffered losses because of their stockbroker’s unlawful or prohibited conduct can file a claim to recover damages against broker dealers like Woodbury Financial Services, which should consistently oversee its employees in order to prevent stockbroker misconduct.

Have you suffered losses in your Woodbury Financial Services investment account due to your stockbroker’s misconduct?  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 stockbrokers for unsuitable recommendations, misrepresentations, and/or other unauthorized and prohibited conduct.

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 40 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 post a comment, call (800) 732-2889, send Mr. Pearce an email at pearce@rwpearce.com, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.







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Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $125 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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