South Florida Broker Fined, Suspended for Undisclosed OBAs and Private Securities Transactions
David Jin Kyu Chong (CRD#: 2679656) is a registered broker and investment adviser. Since March of 2019, Mr. Chong has served as a financial representative of Newbridge Securities Corporation in Boca Raton, Florida. Previously, he was associated with other broker-dealers, including Aurora Capital LLC, Holly Street Wealth Advisors, Wells Fargo Clearing Services, and Morgan Stanley.
On December 22nd, 2020, FINRA announced findings of improper undisclosed outside business activities (OBAs) and unapproved private securities transactions. Mr. Chong consented to the agency’s proposed penalties, including a fine and a suspension. Below, our Miami private placement securities attorneys provide a more detailed overview of the FINRA enforcement action.
FINRA Investigation: Broker David Jin Kyu Chong Currently of Newbridge Securities
In July of 2018, David Jin Kyu Chong was permitted to resign from his position at Wells Fargo Clearing Services. Along with other issues, Mr. Chong was alleged to have engaged in improper OBAs and unapproved private securities transactions. Based on the Form U5 received from the broker-dealer, FINRA initiated its own investigation on the allegations of misconduct against this financial advisor. FINRA recently concluded its inquiry. In the Letter of Acceptance, Waiver, and Consent signed by Mr. Chong (Disciplinary Action NO. 2018059433001), the agency cites the following violative conduct:
- Mr. Chong violated FINRA Rule 2010 by improperly failing to disclose his status as a beneficiary appointment as a fiduciary in relation to certain accounts;
- Mr. Chong violated FINRA Rule 3270 by engaging in undisclosed outside business activities; and
- Mr. Chong violated FINRA Rule 3280(b) by participating in undisclosed private securities transactions.
Broker Sanctions: 11 Month Suspension and $20,000 Fine
Brokerage firms are responsible for the conduct of their financial representatives. To ensure that investors are properly protected, member firms must be made aware of any outside business activities and private securities transactions by financial advisors. For their part, individual advisors have a duty to disclose these arrangements and seek approval from their member firm. If outside business activities or private securities transactions are approved, the brokerage firm assumes responsibility of providing oversight.
As this broker failed to abide by his professional duties under FINRA rules, he is now facing sanctions from the agency. Without admitting or denying wrongdoing, Mr. Chong accepted and consented to FINRA’s penalties, including an 11-month suspension from the securities industry and a $20,000 fine. The suspension is scheduled to run until near the end of 2021.
Schedule a Confidential Case Evaluation With a Miami, FL Investment Fraud Lawyer
At Carlson & Associates, P.A., our Florida investment losses attorneys are diligent advocates for our clients. We know how to hold negligent brokers and brokerage firms accountable. If you have questions about OBAs or private securities transactions, our legal team is ready to help. Call us now for a completely confidential securities fraud consultation. From our Miami legal office, we represent investors throughout all of Florida, including in Palm Beach County, Broward County, and Miami-Dade County.