A New Jersey investment adviser and his firm have been accused of fraud and other violations by the Securities and Exchange Commission.
According to an SEC press release, charges were filed against David Yow Shang Chiueh of East Hanover and his investment advisory firm, Upright Financial Corp. The complaint alleges that the defendants disregarded their 2021 settlement with the commission and continued with fraudulent actions.
They are accused of misconduct and 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 the 2021 case, Chiueh and Upright settled SEC charges that they violated Upright Growth Fund 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.
Even though they were ordered to stop these actions, the SEC alleged 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.
The complaint states that because the defendants waited over two and a half years to sell the relevant stock, the fund and its investors lost about $1.6 million.
It was further alleged that Chiueh operated the fund’s board without the required number of independent trustees and misrepresented the independence of one trustee in filings. The defendants also allegedly failed to provide or withheld key information from the board, and 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 defendants are charged 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.
At Hyman Cotter PC, we represent clients nationwide who are the victims of unauthorized trading, breaches of fiduciary duty and other forms of financial adviser misconduct and securities fraud. Our team of lawyers brings a diverse range of knowledge and experiences to our clients’ cases. If your financial adviser made trades without your consent, you may be able to pursue a lawsuit to recoup your losses. We’ll help you understand your rights and options. Contact us at 312-291-4600 or email our team to learn more.
