Zachary Samuel Berkey of Melville New York a stockbroker formerly registered with Four Points Capital Partners LLC has been barred by Securities and Exchange Commission (SEC) from being a stockbroker or investment advisor or otherwise associating with securities broker dealers or investment advisories according to an SEC Order supported by allegations that Berkey: (1) executed unauthorized trades (2) churned the accounts of his customers (3) made investment recommendations which failed to be suitable (4) made false or misleading statements about investments and (5) committed fraud. In the Matter of Zachary S. Berkey Administrative Proceeding File No. 3-18872 (Oct. 19, 2018).
Prior to the Order, Berkey was charged by SEC in a Complaint that contained accusations against him of unauthorized trading, unsuitable recommendations, misrepresentation, churning and fraud while he was employed by Four Points Capital Partners. SEC v. Zachary S. Berkey et al. Civil Action No. 17 Civ. 9552 (S.D.N.Y. Dec. 6, 2017).
Allegedly, customers were exposed to in-and-out trading which caused them to collectively sustain $573,867.00 losses while allowing Berkey to generate $106,000 in commissions. Berkey purportedly advised at least six customers on a costly in-and-out trading strategy without having an adequate foundation to believe that his recommendations were appropriate for anyone let alone those specific investors. The stockbroker also allegedly failed to consider his customers’ specific circumstances, objectives and needs.
The Complaint stated that the values of customers’ investments had to increase substantially to offset the high costs and turnover associated with Berkey’s trading. Allegedly, the customers’ accounts had been churned and excessively traded by the stockbroker. In addition, customers were left in the dark in regard to the fees, commissions and costs which pertained to the stockbroker’s recommendations.
SEC alleged Berkey’s conduct was violative of Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5 and Securities Act of 1933 Section 17(a). The Order revealed that Berkey consented to a judgement which permanently enjoined him from violating those securities laws and SEC rules. Also, the stockbroker was ordered to disgorge $106,000.00 and pay civil penalties totaling $71,000.00. (S.D.N.Y. Apr. 18, 2019).
FINRA Public Disclosure confirms that Berkey is referenced in four customer initiated investment related disputes containing allegations of his misconduct during the period in which he was associated with securities broker dealers including Four Points Capital Partners. Specifically, Berkey is the subject of a customer initiated investment related arbitration claim in which the customer sought $146,074.00 in damages founded on accusations of the stockbroker violating securities laws through his stock trading in a customer’s account during the time that he was associated with Four Points Capital Partners. FINRA Arbitration No. 18-03481 (Nov. 12, 2018).
