Strategy Asset Managers, LLC

Discharged

Mr. Chong was suspended from FINRA for failing to disclose to his member firm employers that he was a beneficiary of his firm customer's trust, appointed healthcare power of attorney for the same customer, and/or empowered to remove and/or appoint a successor trustee for the trust

Mr. Chong's RA Registration was terminated following the California Department of Financial Protection and Innovations request following a FINRA suspension.

FINRA

Without admitting or denying the findings, Chong consented to the sanctions and to the entry of findings that he failed to disclose to his member firm employers that he was a beneficiary of his firm customer's trust, appointed healthcare power of attorney for the same customer, and/or empowered to remove and/or appoint a successor trustee for the trust. The findings stated that Chong's customer created a revocable living trust to hold all of her assets, including her brokerage account. The customer appointed Chong to act as her healthcare power of attorney (HPOA). The customer amended the trust and granted the power to remove and appoint its successor trustee to Chong. The customer amended the trust again to, among other things, name Chong as beneficiary. Chong also began acting on the customer's behalf in reliance on the HPOA. Chong did not disclose his appointment as HPOA or trust-related powers to, or seek approval to accept them from his member firm. Chong disclosed the appointments when the customer passed away. The firm did not approve Chong's request and instructed him to resign the appointments. However, Chong still appointed a new trustee and concealed the fact that he remained a beneficiary with he was also the registered representative for the trust's firm account by making false statements on annual compliance questionnaires. The findings also stated that Chong participated in outside business activities without providing prior written notice to his firm. Chong was named an officer and member of the board of directors for a company. He received shares of company stock, representing 50% ownership interest. Chong was later named president of the company. As an officer and board member, Chong participated in at least one board meeting where the board made management decisions and discussed potential business plans. However, Chong did not disclose ownership interest and positions with the company until over a year later. Additionally, Chong and his wife purchased residential property in Florida. Although Chong began collecting rent on the property, he did not disclose or receive approval from the firm for his outside business activity until years later. Chong also falsely stated that his involvement with this rental property began later than it did. Chong falsely stated on a compliance questionnaire that he was not involved with any outside business activities and failed to disclose in writing his involvement with the company and his rental property on compliance questionnaires. The findings also included that Chong participated in private securities transactions without first notifying or receiving prior written approval from his firm. The trust invested in the company. Chong introduced the trust to the company, and facilitated its investment by, among other things receiving and forwarding the investment agreement, stock certificates, draft board of directors minutes, and other investment updated, to the trust. The trust invested in a different company Chong introduced the trust to the investment opportunity and shared his favorable opinion of the business venture. Chong also received and forwarded the convertible note purchase agreement, closing documents and wiring instructions, as well as the company's marketing materials and other investment updates, to the Trust. The trust invested in a third company. Chong facilitated the trust's investment by, among other things, receiving and forwarding the loan agreement and promissory note, and other information updates, to the trust. The trust's investments in the three companies were securities. Chong did not receive compensation for his participation in the trust's investments. Chong also falsely stated on compliance questionnaires that he was not engaged in any private securities transactions.

Acceptance, Waiver & Consent(AWC)

Civil and Administrative Penalty(ies)/Fine(s)

$20,000.00

Suspension

All Capacities

11 Months

1/19/2021

12/18/2021

Wells Fargo Clearing Services, LLC.

Voluntary Resignation

Among other issues, Mr. Chong admitted to arranging loans out of a client trust account for which his wife serves as trustee and is a beneficiary, and recommending an unapproved investment to the client trust account.