The Securities and Exchange Commission has charged two former brokers—Zachary S. Berkey of Centereach, N.Y., and Daniel T. Fischer of Greenwich, Conn.—with churning the accounts of 10 clients at Four Points Capital Partners, a New York-based independent broker-dealer where the two previously worked.
According to the complaint, the brokers' clients lost a total of $573,867 while the two received approximately $106,000 and $175,000, respectively, in commissions.
Without admitting or denying the SEC's allegations, Mr. Fischer consented to a final judgment that orders him to return his allegedly ill-gotten gains with interest and pay a $160,000 penalty. He also separately agreed to an SEC order barring him from the securities industry. Last year, he accepted a $5,000 fine from the Financial Industry Regulatory Authority that was imposed in connection with his trading activity.
The SEC's litigation against Mr. Berkey will proceed in federal district court in Manhattan.
(More: SEC task force targets retail investor fraud at the adviser level.)
Mr. Fischer began his securities career in 1997 at Monroe Parker Securities, a firm that was expelled by Finra in 1999, and worked at eight firms through 2012, when he joined Four Points Capital.
Mr. Berkey, who is no longer employed at a securities firm, began his career in 1997 at the J.B. Sutton Group and moved to Woodstock Financial Group the following year. In 2011, he joined National Securities Corp., and then Four Points Capital in 2013. He left the firm in 2015.
In October, the SEC announced an initiative aimed at addressing the harm that is done to retail investors by brokers and investment advisers.
Stephanie Avakian, co-director of the SEC Division of Enforcement, said at the time that the agency's retail strategy task force would use data analytics to find widespread problems involving inadequate fee disclosure and unsuitable product recommendations.
It parses data about products, types of fees and investors, advisory office locations and sales practices. In addition to market data, it draws on the thousands of tips, complaints and referrals that come into the SEC as well as findings from adviser examinations.
