Fraudster Gambles $1.6M on ONE Stock, Loses BIG!

U.S. Securities and Exchange Commission Litigation Release No. 26270, dated March 17, 2025.

The SEC charged an investment adviser, David Yow Shang Chiueh, and his firm, Upright Financial Corp., with fraud for violating a mutual fund's concentration policy. Despite a prior settlement, they continued to over-invest the fund in a single company and industry, causing significant losses to investors.

In Plain English

Imagine you have a piggy bank for your friends, and you promised to put money into many different toys, not just one. But you kept putting almost all the money into just one toy, even after being told not to. This one toy lost a lot of value, and your friends lost money. The SEC is saying the investment manager did something similar with a fund, causing losses.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Establish Fund Policy Since 1998, the Upright Growth Fund had a fundamental policy to invest no more than 25% of its assets in any single industry. This policy was disclosed to investors and was designed to spread risk.
2. Violate Policy (First Time) Between July 2017 and June 2020, David Yow Shang Chiueh and Upright Financial Corp. violated this Concentration Policy by investing more than 25% of the Fund's assets in one industry, including the semiconductor industry. This conduct led to fraud and breach of fiduciary duties.
3. Settle with SEC In November 2021, the SEC issued a settled order against Chiueh and Upright for these violations. As part of the settlement, they promised to stop this conduct.
4. Continue Violating Policy Despite their promises, from at least November 24, 2021, through September 29, 2023, Chiueh and Upright continued to invest more than 25% of the Fund's total assets in a single company, identified as 'Company A'.
5. Further Industry Overconcentration Even after September 29, 2023, the defendants continued to violate the Fund's Concentration Policy by investing more than 25% of its assets in the semiconductor industry, up to at least June 23, 2024.
6. Cause Investor Losses By waiting nearly two years to reduce the Fund's holdings in Company A below the 25% limit and continuing to overconcentrate in the semiconductor industry, the defendants caused losses of approximately $1.6 million to the fund and its investors.
7. Collect Fees on Overconcentration During this period of overconcentration, the defendants collected approximately $100,000 in advisory fees on the Fund's assets that exceeded the 25% limit.
8. Mismanage Fund Board During the same period, Chiueh operated the fund's board of trustees without the required number of independent trustees and misrepresented the independence of one trustee in filings with the SEC.
9. Withhold Information from Board The defendants also failed to provide, or withheld, key information from the Board, including details necessary to evaluate the advisory contract, which was not put to a required vote and was misrepresented in filings.
10. Hire Accountant Improperly Furthermore, the defendants hired an accountant to audit the fund without obtaining the required vote from the Board of Trustees.

The Enforcement Action

The SEC charged David Yow Shang Chiueh and his firm, Upright Financial Corp., with fraud and other violations for misconduct related to a mutual fund's concentration policy and board governance. The SEC seeks permanent injunctive relief, disgorgement of ill-gotten gains, and civil penalties. The complaint was filed in the U.S. District Court for the District of New Jersey.

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