David Yow Shang Chiueh; Upright Financial Corp.
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26270 / March 17, 2025
Securities and Exchange Commission v. David Yow Shang Chiueh and Upright Financial Corp., No. 2:25-cv-01920 (D.N.J. filed Mar. 17, 2025)
SEC Charges New Jersey Investment Adviser and His Firm with Fraud and Other Violations
Today, the Securities and Exchange Commission 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.
The SEC’s complaint, filed in federal court for the District of New Jersey, charges the defendants with violating Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933 (“Securities Act”), Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5(a) and 10b-5(c) thereunder, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”), and Section 15(c) of the Investment Company Act of 1940 (“Investment Company Act”). The complaint charges Chiueh with violating Securities Act Section 17(a)(2), Exchange Act Section 10(b) and Rule 10b-5(b) thereunder, and Advisers Act Section 206(4) and Rule 206(4)-8(a)(1) thereunder. The complaint charges Chiueh with aiding and abetting Upright Investments Trust’s violations of Securities Act Section 17(a)(2), Exchange Act Section 10(b) and Rule 10b-5(b) thereunder, and Investment Company Act Section 10(a). The complaint also charges the defendants with aiding and abetting Upright Investments Trust’s violations of Investment Company Act Sections 13(a)(3) and 32(a). 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 Corey 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.