FINRA Case #2014041590801)
John William Cutshall (CRD #874352, Woodsboro, Maryland) – Cutshall was named a respondent in a FINRA complaint alleging that he abused his position as trustee for trusts that he administered on behalf of a married deceased couple and an elderly widow, by converting and improperly using funds from these trusts.
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 one of the deceased customers, stating in pertinent part that Cutshall was to receive 50 percent of the customer’s trust after the customer, his wife and their daughter had all died.
After a 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, he repaid only $229,100 and kept the difference of $170,900.
Cutshall did not disclose to his firm or the law firm that he kept these funds. Based on the presumption that the husband signed the handwritten note and that it was enforceable, the law firm told Cutshall that he was entitled to receive approximately $292,100 from the account of the residuary trust based on their accounting of the funds attributable to the trust in that account. In total, Cutshall received approximately $463,000 from the account of the residuary trust.
The complaint also alleges that Cutshall administered a trust for the benefit of the elderly customer and improperly withdrew and used $2,000 in customer funds to fund his gambling during a day at a casino.
The complaint further alleges that despite completing forms that called for the disclosure of such information, Cutshall never disclosed to his firms that he had been named as a beneficiary of a customer’s trust. Cutshall further failed to disclose that he served in any other fiduciary capacity for the deceased customers or that he would be compensated for any such role and failed to provide his firms a copy of the handwritten note naming him as a beneficiary of the trust. Cutshall actively thwarted his firms’ ability to supervise his conduct. In addition, the complaint alleges that Cutshall made a misrepresentation on a firm annual compliance questionnaire.
Cutshall is currently employed at Lombard Securities Incorporated (CRD# 27954). Prior he was employed at Morgan Stanley Smith Barney (CRD# 149777) in which he was discharge in 2014.
If you feel you have been misled or taken advantage by John William Cutshall or any Broker and wish to discuss legal action, please contact Darren Blum at 1-877-786-2552 (1-877-STOCK LAW), www.stockattorneys.com for a free consultation.