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Maryland Broker John W. Cutshall Barred by FINRA

Did you suffer financial losses investing with John William Cutshall? The Maryland broker (CRD #874352) was recently barred from the securities industry by FINRA over allegations that he took $400,000 from the trust account of a deceased client.

John W. Cutshall

John W. Cutshall is a registered broker with Lombard Securities in Maryland. He was previously registered with Morgan Stanley in Frederick, MD from June 2013 to June 2014, and with RBC Capital Markets, LLC in Frederick, MD from March 2009 to June 2013. Cutshall was discharged by Morgan Stanley in May 2014 for allegations that he took money from a customer without authorization.

On April 8, 2019, Cutshall submitted an offer of settlement consenting, without any admission or denial of allegations, to FINRA’s entry of findings and the imposition of disciplinary sanctions. Per the terms of the Offer, Cutshall is to be barred from the securities industry.

FINRA’s Allegations

In its August 2018 complaint, FINRA alleged that between 2012 and 2014, Cutshall abused his position as a trustee for deceased and elderly clients by improperly converting and using client trust funds, and concealing his conduct and position as a named beneficiary to a trust for which he was serving as trustee.

FINRA’s complaint claimed Cutshall used his role as trustee of a residuary trust held at his employer to write more than 30 checks totaling roughly $400,000, and that he deposited those checks into his own bank account without disclosing the transactions.

After he had already taken the $400K in funds, the complaint notes, Cutshall claimed to have been given authorization via a handwritten note signed by the deceased client. He then contacted a law firm to, among other things, provide counsel regarding the note’s validity. After being advised to return the funds, Cutshall repaid $229,100 to the trust account, keeping the remaining $170,900.

The complaint further alleged that in April 2014, Cutshall used a check from another client’s trust for which he was trustee to engage in a $2,000 transaction which he used to gamble. 

Per FINRA’s complaint, Custshall submitted an Offer consenting to findings of regulatory violations involving:

  • Conversion (FINRA Rule 2150(a) and 2010) by committing an unauthorized act depriving an owner of their property / funds permanently or indefinitely;
  • Improper Use of Customer Funds by withdrawing and using customer funds for his own personal benefit;
  • Failure to Abide by Standards of Commercial Honor and Principles of trade for failing to disclose that he had been named as a beneficiary of a trust account, provide a copy of a handwritten note naming him as beneficiary, and disclose trust account withdrawals; and
  • Making false or misleading statements on a 2014 Morgan Stanley sales compliance questionnaire.

Meyer Wilson is a nationwide investor claims and class actions law firm that fights for clients nationwide after they suffer financial losses as a result of investment fraud and misconduct. If you have questions about your rights and legal options, call (800) 738-1960 or contact us online to speak with an investment loss attorney.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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