"Someone's sitting in the shade today because someone planted a tree a long time ago"
Steven Zoernack starts in humble beginnings- Steve was born in White Plains, New York to hard working parents that both arrived from Stuttgart, Germany in 1959. Steve’s father served in the US army as a ski instructor in Colorado and became a union electrician. Steve’s Mom was a seamstress and homemaker. Speaking only German, Steve first learned English at age 5 in his kindergarten class and by age 7 was asked to skip 3rd grade, and later skipped 8th grade math.
Leaves home for college and Wall St. - In part due to his strength in math and science, Steve was accepted into Boston University’s School of Engineering and as an athlete played Attack position on the School’s lacrosse team. Steve also opened a small trading account at this time and his love for trading the markets began. Not unlike some notables like Bill Gates, Steve Jobs, Richard Branson and Mark Zuckerberg, Mr. Zoernack answered the call of adventure and left college and his comfort zone for a sales and trading position on Wall St.
Receives training from a mentor, a Wall St. Veteran - Although Wall St. in the early 1980s was a new and intimidating place for some, at age 22 Steve found a mentor and the much older and otherwise mysterious and secretive Greek trader Mr. Kyriakou. During many in-office meetings and lunches at a Chinese restaurant in the World Trade Center, Mr. Kyriakou taught Steve about Quant trading strategies before most traders knew what they were. The simpler the quant strategies, the better they worked. Using these newly obtained strategies, and at his mentor’s urging, Steve’s journey as an investment manager and trader began when he placed one of his first trades when his technical research showed that the Coffee futures market looked like it was going to break out on the upside. Steve excitedly called all of his investors to recommend the trade. After buying all the Coffee futures he could, prices were soon “lock limit up” for about the next 14 days and his investors made a small fortune. The following year, at age 23, Steve became the brokerage firm’s nationwide “Rookie of the Year” and the NY branch’s top 3 broker out of 50. Later that year, Steve moved to Central Park West at 76th Street on Manhattan’s Upper West Side.
Steve’s early success eventually led to an offer to join the the then top 5 investment banking firm Bear Stearns & Cos. where he traded stock index arbitrage using his Quant strategies. Helping his clients/investors to make money led to his own continued financial success and allowed Steve to join Half Moon Bay Yacht Club at age 28 and Westchester Country Club at age 30 where he was married in 1996. His first son was born in 1997 and a daughter in 2005 along with another son in 2011. Steve also gave back a lot of time and money and coached a Special Olympics softball team that won Gold in 2017, taught religion to 3-7 year olds, and sponsored and chaperoned the Cincinnati Reds Baseball Buddies Program for underprivileged kids.
On his quest he faces new challenges and temptations - To share his successful investment strategy on a larger scale, Steve launched EquityStar Capital investment funds in 2009. Since there is so much more to running in investment funds than just good trading, he soon became overwhelmed with the other aspects of the business such as administration, accounting, legal and compliance. Additionally, Steve tried so hard to generate great returns for his investors that his statistical arbitrage and equity/long short momentum investment strategies became very complicated and veered away from the simple but highly effective Quant strategy that he learned from his mentor Mr. Kyriakou in the early 1980s.
On his quest he ends up in a minor battle with the U.S. government - A few years later in 2013 after a routine audit, the Securities and Exchange Commission (SEC) determined that, among other things, EquityStar’s outside and independent accounting firm (Fund Administrator) wasn’t properly expensing salaries in one of the 4 of EquityStar's investment funds, treating them as a “due from affiliate”, or a “draw” or “loan”. Salaries were an allowable fund expense but weren’t being accounted for properly by the fund’s outside independent vendors.
Steve and his attorneys fully cooperated with the SEC and quickly settled with them.
Its noteworthy that before Steve knew of any case against him, he replaced the erring and negligent accounting firm, he and his new accounting firm disclosed the former accountants' error to investors and Steve took full responsibility and began making investor reimbursements for the accounting error.
The erring accounting firm was ultimately fined by the SEC and the official SEC court order against Apex Fund Services stated: “Apex caused EquityStar’s and Zoernack’s violations of Sections 206(2) and 206(4) of the Advisers Act and Rule 206(4)-8“.
However, despite the above, and despite the issues fully settled between Steve and EquityStar’s investors, and in process of being reimbursed by Steve and the Fund, the government came along after the fact and felt that Steve should spend a couple of years in a federal camp like the one Martha Stewart attended, and when Steve and his legal team pointed out the unfairness of this, the US government then threatened to indict Steve’s wife and other family members (who were never employees) if he didn’t agree.
Steve's attitude remains positive and optimistic and looks at this concluded development as a learning experience that’s now in the distant past. He also feels he‘s now more focused, stronger, disciplined and knows what really matters in life.
Almost loses everything and returns home after learning valuable lessons - Returning home after almost losing everything, Steve was challenged to make changes within himself and experience personal growth.
This transformation and atonement led him to what worked best - the success he had enjoyed when life was still simple. Steve learned a very valuable lesson: life when lived in its simplest form is often life lived at its best.
Steve has expanded his entrepreneurial spirit and enjoys helping others and co-exists with former and also new colleagues in the international business world a stronger, smarter and more experienced professional.
Steve no longer accepts U.S. investor funds for trading and will never launch another hedge fund in the U.S.