SHERMAN – A federal defamation lawsuit asserts that Charles Schwab Corp. was influenced by negative media reports about Chapwood Capital Investment Management, LLC in its decision to sever its professional relationship with the suburban Dallas-based firm.
The 25-page suit, which was filed by Chapwood Investment and its founder Ed Butowsky in the Sherman Division of the Eastern District of Texas on Aug. 3, explains that Butowsky was the subject of an online NPR article dated Aug. 1, 2017 which insinuated he and the Fox News Network “worked in concert under the watchful eye of the (Trump) White House to concoct a story” about the death of Democratic National Committee staffer Seth Rich.
Schwab was believed to have accessed the story. According to the original petition, the “false narrative” that “Butowsky had colluded with the President and Fox News to publish ‘fake news’” caused “an excellent working relationship with Schwab” to end after more than a decade on Aug. 30, 2017.
During last August, Schwab reportedly requested to have a conference call with Butowsky regarding his “political views and (Donald) Trump.” Butowsky agreed to the call despite expressing confusion about its purpose.
“The call never took place,” the suit says. “Rather, Schwab and its apex officials proceeded post-haste and with reckless disregard for the truth to defame Chapwood and Butowsky, disparage Chapwood’s business, and intentionally and maliciously interfere with Chapwood’s client relationships.”
Alleging Schwab failed to verify the statements about Butowsky, court documents say the plaintiffs suffered “loss of business, income and clients, injury to good will, and the insult, embarrassment, humiliation and injury to reputation.”
“Until Schwab defamed Chapwood and Butowsky and intentionally interfered with Chapwood’s business in August 2017, Chapwood was a large advisory firm with a stellar reputation, growing business and assets under management of more than $237 million,” the suit says. “Because of Schwab’s intentional wrongdoing, Chapwood’s assets under management plunged by over $45,000,000.00. Chapwood lost over 268 customer accounts and suffered a substantial loss of income.”
Consequently, the complainants seek no less than $100 million in addition to a jury trial.
Ty Clevenger of Brooklyn, N.Y. serves as their lead counsel.
Sherman Division of the Eastern District of Texas Case No. 4:18-CV-0548