UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC Admin Release 34-86369, IA Release 40-5299 / July 12, 2019: The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Kwen Y. Chun ("Chun" or "Respondent"). The Commission finds that on July 22, 2015, Chun pleaded guilty to one count of mail fraud in violation of 18 U.S.C. §§ 1341 and 1342 before the United States District Court for the District of New Jersey, in United States v. Kwen Y. Chun, Case No. 2:15-cr-00366. On March 3, 2016, Chun was sentenced to a prison term of 33 months, followed by two years of supervised release. He was also ordered to make restitution in the amount of $530,418.34. The criminal information against Chun alleged that, from 2009 to 2014, Chun misappropriated client funds by, among other things, obtaining loans against clients' insurance policies, or causing clients to obtain loans against their insurance policies, and diverting the funds to bank accounts that Chun had created and controlled in the names of firm clients or his relatives.

Order

Bar (Permanent)

association with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Indefinite

7/12/2019

participating in any offering of a penny stock

Indefinite

7/12/2019

NEW JERSEY BUREAU OF SECURITIES

BETWEEN AT LEAST SEPTEMBER 2005 AND APRIL2014, CHUN ENGAGED IN DISHONEST OR UNETHICAL CONDUCT WITH REGARD TO AT LEAST EIGHT OF HIS CUSTOMER ACCOUNTS. SPECIFICALLY, WITHOUT CUSTOMER KNOWLEDGE OR CONSENT, CHUN CAUSED HUNDREDS OF THOUSANDS OF CUSTOMER FUNDS TO BE EITHER DIVERTED OR LOANED TO EITHER CHUN'S PERSONAL BANK ACCOUNT, OR A POST OFFICE BOX IN HYDE PARK, NEW YORK THAT HE ALSO CONTROLLED AND MAINTAINED. CUSTOMER FUNDS WERE THEN USED BY CHUN FOR HIS OWN PERSONAL BENEFIT OR TRANSFERRED INTO ACCOUNTS HELD BY HIS WIFE AND DAUGHTER FOR THEIR OWN PERSONAL USE AND BENEFIT. TO CONCEAL HIS CONDUCT, AMONG OTHER THINGS, CHUN CREATED FICTITIOUS ACCOUNT STATEMENTS. CHUN WAS THE SUBJECT OF A FINRA ORDER BARRING HIM FROM ASSOCIATING WITH FINRA MEMBERS. CHUN ENGAGED IN DISHONEST OR UNETHICAL PRACTICES IN THE SECURITIES BUSINESS, BANKING, INSURANCE BUSINESS OR INVESTMENT ADVISORY BUSINESS.

Consent

Bar (Permanent)

ALL CAPACITIES

7/24/2015

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

$80,000.00

Revocation

CHUN'S INVESTMENT ADVISER REPRESENTATIVE REGISTRATION IS HEREBY REVOKED. CHUN INDIVIDUALLY, AND BY OR THROUGH ANY PERSON, CORPORATION, BUSINESS ENTITY, AGENT, EMPLOYEE, BROKER, PARTNER, OFFICER, DIRECTOR, ATTORNEYS-IN-FACT, STOCKHOLDER, AND/OR ANY OTHER PERSON WHO IS DIRECTLY OR INDIRECTLY UNDER THEIR CONTROL OR DIRECTION, IS PERMANENTLY BARRED FROM BEING A PARTNER, OFFICER, OR DIRECTOR OF AN ISSUER, BROKER-DEALER OR INVESTMENT ADVISER OR FROM OCCUPYING A SIMILAR STATUS OR PERFORMING A SIMILAR FUNCTION OR FROM DIRECTLY OR INDIRECTLY CONTROLLING AN ISSUER, BROKER-DEALER OR INVESTMENT ADVISER, OR FROM ACTING AS A BROKER-DEALER, AGENT OR INVESTMENT ADVISER OR FROM BEING EMPLOYED OR ASSOCIATED WITH A BROKER DEALER OR INVESTMENT ADVISER IN ANY CAPACITY IN THE STATE OF NEW JERSEY; CHUN AGREES THAT HE WILL NEVER APPLY TO THE BUREAU TO BECOME A REGISTERED BROKER-DEALER, AGENT OF A BROKER-DEALER, INVESTMENT ADVISER, OR INVESTMENT ADVISER REPRESENTATIVE, AS DEFINED BY THE SECURITIES LAW; CHUN IS HEREBY DENIED ALL EXEMPTIONS CONTAINED IN N.J.S.A. 49:3-50(A)(9), (10), AND (11) AND N.J.S.A. 49:3-SO(B); AND THE EXEMPTIONS TO THE REGISTRATION REQUIREMENT PROVIDED BY N.J.S.A. 49:3-56(C) AND N.J.S.A. 49:3-56(G) ARE HEREBY REVOKED AS TO CHUN.

FINRA

WITHOUT ADMITTING OR DENYING THE FINDINGS, CHUN CONSENTED TO THE SANCTION AND TO THE ENTRY OF FINDINGS THAT HE MADE A TOTAL OF NINE UNAUTHORIZED DISBURSEMENTS FROM A CUSTOMER'S VARIABLE ANNUITY AND INSURANCE POLICY TOTALING APPROXIMATELY $201,144. THE FINDINGS STATED THAT CHUN FORGED THE CUSTOMER'S NAME ON SEVEN ANNUITY WITHDRAWAL FORMS, AND REQUESTED TWO LOANS FROM THE CUSTOMER'S INSURANCE POLICY WITHOUT THE CUSTOMER'S KNOWLEDGE OR CONSENT. CHUN DIRECTED THE FUNDS TO A CHECKING ACCOUNT THAT HE OPENED IN THE CUSTOMER'S NAME WITHOUT THE CUSTOMER'S AUTHORIZATION OR KNOWLEDGE. CHUN WAS THE BENEFICIARY OF THE CHECKING ACCOUNT. AS A RESULT, CHUN CONVERTED THE FUNDS FOR HIS OWN USE AND BENEFIT.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

8/11/2014