The Securities and Exchange Commission (SEC) announced today that it has filed charges against David Yow Shang Chiueh of East Hanover, New Jersey, and his investment advisory firm, Upright Financial Corp., for engaging in fraudulent conduct and violating key securities laws. The charges relate to their investment decisions that resulted in losses of $1.6 million to the Upright Growth Fund and its retail investors.
In November 2021, Chiueh and Upright settled previous SEC charges that they violated the Upright Growth Fund’s policy by investing more than 25 percent of the fund’s assets in a single industry between July 2017 and June 2020. This earlier misconduct included fraud and breaches of fiduciary duties. Despite this settlement, the SEC alleges that Chiueh and his firm continued the same fraudulent practices, disregarding the settlement and violating the 25 percent industry concentration limit, making misrepresentations to investors and the fund’s board. The misconduct continued between November 24, 2021, and June 23, 2024, causing the fund to sustain significant losses.
The SEC’s complaint also accuses the defendants of further violations during the same period, including operating the fund’s board with an insufficient number of independent trustees and misrepresenting the independence of one trustee in filings. Chiueh and Upright also failed to provide critical information to the board and improperly hired an accountant for the fund without obtaining the necessary approval from 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 violations of antifraud provisions and other key provisions of federal securities laws, including the Investment Advisers Act and Investment Company Act. The Commission seeks permanent injunctive relief, the return of allegedly ill-gotten gains, and civil penalties.
The SEC’s investigation was led by Stephen Holden and Ming Ming Yang, and supervised by Lee A. Greenwood and Corey Schuster of the Enforcement Division’s Asset Management Unit, with additional support from Debra Jaroslawicz, senior trial counsel in the SEC’s New York Regional Office. The litigation will be led by Ms. Jaroslawicz, Mr. Holden, and Ms. Yang.
