John Cutshall: Former Lombard Securities Advisor Barred by FINRA

A disciplinary action taken by the Financial Industry Regulatory Authority against former Woodsboro, Maryland broker and investment advisor John Cutshall (CRD# 874352) barred him over allegations he abused his position as trustee by converting and misusing funds. A former representative of Lombard Securities, Cutshall was indefinitely barred from acting as a broker or otherwise associating with a broker-dealer firm as a result of these findings.

According to an order accepting an offer of settlement (No. 2014041590801) dated April 2019, a FINRA complaint alleged John Cutshall abused his trustee status “for trusts that he administered on behalf of separate customers, a married deceased couple and an elderly then 91-year widow.” The complaint alleged he converted funds from these accounts and abused them, taking a total of approximately $400,000 from a deceased customer’s residuary trust’s account. He allegedly took the funds by “using his position as trustee to write checks drawn against the trust’s account,” after which he deposited these checks into a bank account he held. FINRA stated that he did not disclose this conduct to his member firm. According to the complaint, he asserted “there was a handwritten note” signed by the deceased customer only after he had taken $400,000 from that customer’s trust, and that he hired a separate law firm—not the one behind the trust’s drafting and witnessing—to provide him with “an opinion” concerning the note’s “enforceability.” FINRA’s complaint states that the opinion “acknowledged the suspicious nature of the signature” and found that he “had no claim to any assets” from the customer’s trust, advising him to return the funds. At this point, according to FINRA, he repaid the trust “only $229,100,” keeping $170,900.

FINRA’s complaint goes on to say that the law firm later performed an accounting that determined Cutshall was entitled to a distribution from the trust of approximately $292,100; however, according to FINRA, he had not informed the firm that he had kept some of the funds he had been advised to return, leading to him taking a total of $463,000, “significantly more than he was purportedly entitled to under the handwritten note.” FINRA’s complaint states that this constituted conversion of funds from the account in contravention of FINRA rules. In connection to these and other allegations in the complaint, Cutshall was barred from acting as a broker or otherwise associating with a broker-dealer firm.

John Cutshall is not currently registered as a broker or investment advisor. His employment history includes Lombard Securities in Woodsboro, Maryland, Morgan Stanley, RBC Capital Markets, Ferris Baker Watts, and Baker Watts & Company. He currently holds no state registrations and has passed four securities industry qualification examinations.