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SEC Charges: Four Points Capital Partners LLC Financial Advisors Zachary Berkey and Daniel Fischer

Posted on Sunday, March 11th, 2018 at 9:07 am    

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Erez Law is currently investigating Four Points Capital Partners LLC financial advisors Zachary Berkey (CRD# 2884767) and Daniel Fischer (CRD# 2796625) regarding unsuitable recommendations and churning in customer accounts.

In December 2017, the Securities and Exchange Commision (SEC) charged Berkey and Fischer with making unsuitable trades that were costly for customers and lucrative for the brokers. According to the complaint, Berkey and Fischer conducted in-and-out trading that caused 10 customers of Four Points Capital Partners LLC to lose $573,867, while Berkey and the other respondent received approximately $106,000 and $175,000, respectively, in commissions. The brokers recommended to six customers the high-cost in-and-out trading strategy without any reasonable basis to believe that these recommendations were suitable. According to the SEC’s complaint, since the customers incurred significant costs with every transaction and the securities were held briefly, the price of the securities had to rise significantly for customers to realize even a minimal profit. The SEC complaint also alleges that the respondents churned customer accounts and concealed the costs associated with their recommendations, including commissions and fees.

Berkey was registered with Four Points Capital Partners LLC in Melville, New York from 2013 to 2015.

In December 2014, the State of Montana opened an investigation into Berkey regarding, “Investigation of alleged unsuitable recommendations and excessive trading in customer accounts.”Berkey has been the subject of four customer complaints between 2000 and 2014, one of which was denied and one was closed without action, according to his CRD report:

April 2009. “Churning resulting in losses, unauthorized trading on 1 out of 224 stocks but zachary berkey was not a registered representative on this account when the unauthorized trade occured.” The customer sought $581,394.55 in damages and the case was settled for $30,000.

July 2000. “Misrepresentation, churning.” The customer sought $500,000 in damages and the case was settled for $231,000.

Fischer was registered with Four Points Capital Partners LLC in New York, New York from 2012 to July 2017.

In January 2018, the SEC barred Fischer from association with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO. The SEC filed a complaint alleging that from December 1, 2012, through May 2015, Fischer violated the antifraud provisions of the federal securities laws by recommending an investment strategy that he had no reasonable basis to believe would be suitable for anyone, recommending an investment strategy that was unsuitable for five customers, making material misrepresentations and omissions regarding the investment strategy that he recommended to his customers, churning customer accounts, and engaging in unauthorized trading.

In July 2016, Fischer was sanctioned to $5,000 in civil and administrative penalties and fines and suspended for 20 days after he consented to the sanctions and to the entry of findings that he exercised discretion in customers’ accounts, notwithstanding the fact that he did not have written authorization from the customers to place discretionary trades, moreover, Fischer’s member firm had not approved and accepted the accounts as discretionary.

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Four Points Capital Partners LLC may be liable for investment or other losses suffered by Berkey’s and Fischer’s customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.