SEC Charges New Jersey Investment Adviser and His Firm with Fraud and Other Violations
March 17, 2025 4:54 PM EDT | Source: Newsfile SEC Press Digest
Washington, D.C.--(Newsfile Corp. - March 17, 2025) - The Securities and Exchange Commission today announced that it has filed charges against David Yow Shang Chiueh of East Hanover, New Jersey and his investment advisory firm, Upright Financial Corp., for misconduct and for investing more than 25 percent of Upright Growth Fund’s assets in a single company over multiple years, causing losses of $1.6 million.
In November 2021, Chiueh and Upright settled SEC charges that they, as investment advisers to Upright Growth Fund, violated its policy by investing more than 25 percent of its assets in one industry between July 2017 and June 2020, committing fraud and breaching their fiduciary duties. Despite being ordered to stop this conduct, the SEC’s complaint alleges, the defendants continued their fraud by violating the 25 percent industry concentration limit and making misrepresentations about it between at least November 24, 2021, and June 23, 2024. As a result, the complaint alleges that the defendants’ decision to wait more than two-and-a-half years to sell the relevant stock resulted in losses of approximately $1.6 million to the fund and its investors.
Additionally, the SEC’s complaint alleges the defendants engaged in further misconduct during this same period when Chiueh operated the fund’s board without the required number of independent trustees and misrepresented the independence of one in filings. The defendants also failed to provide or withheld key information from the board, according to the complaint, and they hired an accountant for the fund without the required vote by the board.
“As alleged, the defendants not only ran the fund contrary to its fundamental investment policies, but they actively misled investors and the fund’s board about their conduct,” said Corey Schuster, Chief of the Division of Enforcement’s Asset Management Unit. “Undeterred by their prior SEC settlement involving these very same issues, we allege that the defendants repeatedly violated fundamental rules designed to protect investors in mutual funds.”
The SEC’s complaint charges the defendants with violating antifraud and other provisions of the federal securities laws, including provisions of the Investment Advisers Act and Investment Company Act. The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains, and civil penalties.
The SEC’s investigation was conducted by Stephen Holden and Ming Ming Yang, and supervised by Lee A. Greenwood and Mr. Schuster, all of the Enforcement Division’s Asset Management Unit, as well as Debra Jaroslawicz, senior trial counsel in the New York Regional Office. The litigation will be led by Ms. Jaroslawicz, Mr. Holden, and Ms. Yang.
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