FINRA Filed An Enforcement Proceeding Against Lombard Securities Corp. Broker, John Cutshall, For Allegedly Misappropriating Funds Held In Accounts In Which He Was A Trustee
The Wolper Law Firm is currently investigating claims against John Cutshall, a Financial Advisor at Lombard Securities Corp. in Baltimore, Maryland. John Cutshall has been in the securities industry since the 1970s and previously worked at Morgan Stanley
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on August 10 2018, FINRA filed an enforcement action against John Cutshall, alleging that he violated his duties as trustee when he misappropriated assets held in accounts with which he was trustee. Specifically, FINRA alleges:
“The complaint alleges that in total, Cutshall took approximately $400,000 from the account of the deceased customers’ residuary trust by using his position as trustee to write checks drawn against the trust’s account at his member firm and depositing the checks into his personal bank account. Cutshall did not disclose to his firm that he took these funds. After having already taken $400,000 from the trust, Cutshall claimed for the first time that there was a handwritten note purportedly signed by the deceased customer, the husband. Rather than consult with the lawyer who drafted and witnessed the original deceased couple’s trusts, Cutshall hired a different law firm to, among other things, give him an opinion regarding the enforceability of the handwritten note. The law firm’s legal opinion acknowledged the suspicious nature of the signature on the document and acknowledged that because the deceased wife did not sign the handwritten note or execute a similar document, Cutshall had no claim to any assets deriving from her trust. The law firm advised Cutshall to return the money that he took from the account of the residuary trust so that they could perform an accounting of trust assets based on the value of the husband’s trust and the wife’s trust as of a particular date. Cutshall repaid the residuary trust only $229,100 and he kept the difference of $170,900.“
This is not John Cutshall’s first alleged indiscretion. In 2014, he was terminated by Morgan Stanley for engaging in conduct that violated firm policy.
To review a full copy of the FINRA Complaint, click https://www.finra.org/sites/default/files/fda_documents/2014041590801%20John%20W.%20Cutshall%20CRD%20874352%20Complaint%20va.pdf
To review a full copy of John Cutshall’s FINRA disclosure report, click https://brokercheck.finra.org/individual/summary/874352#disclosuresSection
Financial Advisors are held to the highest standards of conduct, particularly when serving as a trustee. In this instance, it is alleged that John Cutshall violated his fiduciary responsibilities as trustee and, accordingly, will be sanctioned if it is determined that he engaged in the misconduct.
If you or someone you know was a customer of John Cutshall and you experienced investment losses, please contact the Wolper Law Firm at 800.931.8452 or by email at email@example.com to discuss your specific situation and the legal options available. The Wolper Law Firm represents investors nationwide in securities litigation and arbitration.
Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters.