Joseph R. Butler, a Stockbroker with Woodbury Financial Services, Inc., was permanently barred from association with any Financial Industry Regulatory Authority (FINRA) member firm after the National Adjudicatory Council confirmed a Hearing Panel Decision barring Butler for converting customer’s funds and submitting a false annuity beneficiary change request. In the Matter of Department of Enforcement v. Joseph R. Butler, No. 2012032950101 (Sept. 25, 2015).
According to the Decision, Butler took control of the finances of an elderly woman who happened to be suffering from declining mental health, where Butler had converted more than $170,000.00 while naming himself as primary heir and beneficiary on an annuity policy that Butler sold to the elderly woman.
The Decision further indicated that after becoming the joint account holder on the elderly woman’s personal bank accounts, he used the funds to pay his state taxes, while withdrawing more than $26,000.00 from the accounts via checks that were made payable to cash or through an electronic transfer of his account. By taking an unfair advantage of an elderly customer that was in declining mental health and via the submission of an annuity beneficiary change form adding himself as primary beneficiary on the customer’s annuity, FINRA found Butler’s conduct to be violative of FINRA Rule 2010.
The Complaint against Butler was actually amended on December 20, 2013, where Butler was alleged to have drawn two checks on the customer’s account which totaled $29,108.18 (in order to pay state and federal tax liabilities), drew fifteen checks that were payable to cash or to himself which totaled $114,250, and had withdrawn $5,000 via electronic funds transfer.
The National Adjudicatory Council found that Butler’s intentional exploitation of an elderly customer for his personal benefit constituted a serious violation of one of the most important ethical standards that are applicable to FINRA member and warranted Butler’s bar.
Firms and individuals, not surprisingly, are prohibited from unauthorized use of customer funds, borrowing of a customer’s securities or funds, forgery, non-disclosures or misstatements of material facts, and various deceptions and manipulations. Such conduct can also be found to violate criminal and other civil laws, and be subject to sanction from the federal and state government bodies.
Public disclosure records via FINRA’s BrokerCheck reveal that Butler was discharged on August 2, 2012, after Woodbury alleged that Butler violated firm policies by failing to disclose that he was listed as a beneficiary on multiple customer accounts where he wasn’t a family member and where Butler was provided control over one customer’s banking accounts. On July 15, 2015, Butler became subject to a pending customer dispute, in which a customer is requesting $250,000.00 after alleging that Butler had misappropriated funds from her account and took a motor vehicle shoe owned lawfully, while alleging Butler to have engaged in conversion of customer funds.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esquire, and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
