SEC Accuses Upright Financial and Founder of Breaching Prior Settlement and Misleading Investors
From the desk of Jim Eccleston at Eccleston Law
According to InvestmentNews, the Securities and Exchange Commission (“SEC”) has charged registered investment advisor Upright Financial Corp. and its founder, David Yow Shang Chiueh, for violating a prior settlement agreement and continuing a pattern of misconduct that allegedly defrauded investors and breached fiduciary duties.
Chiueh launched Upright Financial in the 1990s, alongside the Upright Investments Trust, which oversees a series of investment funds, including the Upright Growth Fund. As advisors to the fund, Chiueh and Upright Financial entered into a settlement with the SEC in 2021. That agreement resolved earlier allegations that the fund operated in a manner inconsistent with its classification as a diversified investment company and its stated concentration policy. Regulatory filings and shareholder communications had reinforced expectations of broad diversification, according to InvestmentNews.
Despite agreeing to cease such conduct, the SEC now alleges that Chiueh and Upright Financial failed to adhere to the terms of the settlement. The SEC alleges that the firm continued to concentrate more than 25 percent of the fund’s assets in a single industry through at least June 2024. These actions violated the fund’s concentration policy and misled both investors and the board of trustees. The SEC claims this conduct resulted in $1.6 million in losses for the fund and its shareholders.
The SEC’s new complaint also accuses Chiueh and Upright Financial of additional governance failures, including maintaining an insufficient number of independent trustees and falsely representing the independence of at least one board member in regulatory filings.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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