Texas Advisor Ed Butowsky’s Politics Deplete His Client Assets
Ed Butowsky, a publicity-seeking Texas advisor, is learning about the downside of being in the headlines.
Since he was sued last summer over allegations that he and others had planted a false and defamatory news story with Fox News to help Donald Trump’s election campaign, assets under management at his Plano-based registered investment advisory firm have plummeted.
Chapwood Capital Investment Management is now overseeing $192 million of customer assets, down 19.0% from $237 million, according to regulatory filings this month and January 2017. Customer accounts, none of which are discretionary, have plunged to 78 from the 346 reported in Chapwood’s 2017 filing.
“None of this has been good,” said Butowsky, who spent 28 years as a broker at Morgan Stanley, Bear, Stearns and Banc of America Investments before opening Chapwood in 2005, in a brief interview on Tuesday.
The advisor is back in the news because of two additional defamation lawsuits filed this month that name him among the defendants.
The lawsuits stem from Butowsky’s role in promoting a story alleging that Seth Rich, a staffer at the Democratic National Committee, was murdered in Washington in 2016 because of his alleged involvement in providing DNC documents to WikiLeaks in an attempt to derail Hillary Clinton’s campaign.
The initial litigation was filed by a detective who Butowsky allegedly hired to help Rich’s family solve the murder. The detective charged that the advisor was working with Trump campaign officials before and after the election to divert attention from claims that Russians had hacked into DNC computers.
Fox News, where Butowsky had appeared as a commentator, reported in a since-retracted 2017 story that the detective had found evidence to support the claims about the DNC leaks.
This month’s lawsuits were filed separately by Rich’s parents and his older brother. The broker’s suit asserts that Butowsky and other defendants on the far-right spectrum (including the Washington Times, America First Media Group and its founder) are invading his privacy and defaming him with ongoing false assertions that he played a major role in leaking the DNC documents.
Butowsky denied on Tuesday that he has played an active role in the Fox News report and in ongoing publicity about the leaks. The continuing allegations are like a “venereal disease” that won’t go away, he said.
Following the Fox report last August, Butowsky sent a letter to clients, some of whom he said are Democrats, reassuring them that his office was open.
“They care about their money and the job I’m doing,” he told AdvisorHub in August. “I’m working hard, our office is working fine, there’s no problem whatsoever.”
Despite the hit to his assets, Butowsky, who also maintains a brokerage license through independent broker-dealer Waterford Capital, is not shying away from the limelight.
The flip side of the controversies, he said, is that they are generating calls from prospects.
He also continues to promote himself on LinkedIn as having been one of Morgan Stanley’s “top 5” teams “out of 14,000 teams.” He ranked “number one” at the firm, the profile says, without providing details about the timing.
According to his BrokerCheck history, Butowsky worked at Morgan Stanley for 15 years from December 1987 through August of 2002.