FINRA

Seol was named a respondent in a FINRA complaint alleging that while associated with a member firm, he formed an outside corporation as its President and CEO, and through the corporation, he solicited investments totaling $100 million from foreign customers in a limited partnership also formed by him. The complaint alleges that Seol did not provide prior written notice to or receive written approval from his firm concerning the creation of the outside corporation, the formation of the limited partnership, or his plans to introduce and recommend an investment in the limited partnership to potential investors. The complaint also alleges that in each of his annual compliance questionnaires, Seol falsely attested that he had disclosed all current outside business activities, and would abide by his firm's policies and procedures, including those relating to private securities transactions and the disclosure of outside business activities.

Decision

Bar (Permanent)

All Capacities

Indefinite

3/5/2019

Monetary Penalty other than Fines

$6,068.50

Hearing Panel Decision rendered May 30, 2017 wherein Seol was barred from association with any FINRA member in all capacities and ordered to pay costs in the amount of $4,440.70. The sanctions were based on findings that Seol engaged in undisclosed outside business activities through engaging in private securities transactions and made misrepresentations to his member firm in compliance questionnaires. The findings stated that Seol formed a new business to market U.S. investments to overseas investors through the U.S. government's EB-5 program, which permits foreign investors to obtain a U.S. visa in exchange for investing in projects that create U.S. jobs. By soliciting the purchase of $100 million of limited partnership interests by his outside business investors, Seol participated in private securities transactions without prior disclosure to the firm. Shortly after project funding began, both the U.S. Securities and Exchange Commission and FINRA's Department of Enforcement contacted Seol as part of separate investigations into his business. Prior to these regulator inquiries, Seol concealed his outside business activities from his firm. Despite starting the business in September 2011, and traveling to Asia between June 2012 and December 2013 on multiple occasions to solicit business, Seol concealed his outside business on Annual Compliance Questionnaires he provided to his firm in February 2012, February 2013, and February 2014. Having repeatedly concealed his role in his outside business to his supervisor and compliance examiner over several years, Seol was confronted by senior members of his firm in an April 2014 interview after the firm received the inquiry from FINRA. During this interview, Seol explained the EB-5 program and how he formed the outside business in 2011, but claimed it had not generated any business until the end of 2013. Seol claimed that he had received no compensation, had not solicited any firm clients, and did not think he had to disclose the outside business activity because he had received no compensation. Seol claimed that after speaking to counsel he realized that he was wrong about not disclosing his activities and was eager to fix the situation. Shortly after Seol's belated revelation of his outside business activities, the firm terminated him for violating the firm's policy regarding disclosure of outside business activities. On June 14, 2017, Seol appealed the decision to the National Adjudicatory Council (NAC). The sanctions are not in effect pending the appeal. NAC decision rendered March 5, 2019 wherein the findings made are affirmed and the sanctions imposed by the Hearing Panel are affirmed. The NAC affirmed the Hearing Panel's order that Seol pay hearing costs of $4,440.70, and imposed appeal costs of $1,627.80. The decision is final on April 8, 2019. Fines paid in full on November 18, 2019.