According to a recent InvestmentNews article, Zachary Berkey and Daniel Fischer, two brokers with Four Points Capital Partners, were charged with churning the accounts of 10 customers. The brokers clients allegedly lost a total of $573,867, according to the complaint, while the brokers received $106,000 and $175,000 respectively, in commissions. Mr. Fischer is ordered to return his gains with interest and pay a $160,000 fine. He also agreed to be barred from the securities industry by the Securities and Exchange Commission (SEC) in a separate action. He was also ordered to pay $5,000 to the Financial Industry Regulatory Authority (FINRA) in connection with his trading activity. Mr. Berkey’s litigation with the SEC will go to federal district court in Manhattan.
Churning is when a broker excessively trades a customer’s account in order to generate commissions for himself. This can lead to unnecessary fees for the client and is against securities laws. Four Points Capital can be held liable for investment losses, because the firm had a duty to reasonably supervise its employees while they were registered there. Four Points Capital can be sued in the FINRA arbitration forum on a contingency fee basis.
According to FINRA records, Berkey was previously registered with The J.B. Sutton Group, Woodstock Financial Group, National Securities Corp, and Four Points Capital Partners in Melville, New York from April 2013 until January 2015. He has four customer disputes against him and three judgments/liens. He is not currently registered as a broker. Daniel Terry Fischer was previously registered with Monroe Parker Securities, On-Site Trading, Worldco, Quest Capital Strategies, Hold Brothers On-Line Investment Services, E*Trade Securities Dimension Trading Group, Dimension Securities, WTS Proprietary Trading Group, and Four Points Capital in New York, New York from November 2012 until July 2017. He is not currently registered as a broker.