Initiated By
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Allegations
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 David S.Y. Chang ("Chang" or "Respondent"). The Commission finds that on June 25, 2020, In the Matter of David S.Y. Chang, et al., Case Nos. SEU 2010- 046 and SEU-2016-004, the State of Hawaii Department of Commerce and Consumer Affairs ("Department") entered, by consent, a final order ("Hawaii Order") revoking Chang's registration as an investment adviser representative in Hawaii, effective September 30, 2020. Chang consented to the Hawaii Order without admitting or denying the findings and conclusions of the Department. The Hawaii Order concluded that Chang violated, inter alia, Section 485A-501(a)(1), Section 485A-501(a)(2), Section 485A-501(a)(3), and Section 485A-502(a) of the Hawaii Revised Statutes, which prohibit fraudulent, manipulative, or deceptive conduct in connection with the offer, sale or purchase of securities or the provision of investment advice. The Hawaii Order found, inter alia, that from 2008 to 2016, Chang and his associated investment adviser received commissions for investments he solicited investment advisory clients to purchase, did not disclose to investment advisory clients that he was receiving such commissions, did not disclose to investment advisory clients that investment funds would be used to pay Chang's personal debts and obligations and those of his other affiliated companies, engaged in deceit related to loans he took from investment advisory clients, and offered and sold unregistered securities. The Hawaii Order also found that a subset of Chang's violations of Hawaii law "were directed toward, targeted, or were committed against persons, who at the time of the violation, were sixty two years of age or older." On May 25, 2021, In the Matter of WealthBridge, Inc. and David S.Y. Chang, Case No. SEC-2020-00046, the State Corporation Commission of the Commonwealth of Virginia entered, by settlement, a final order ("Virginia Order") declaring that Chang is "permanently barred from registration in Virginia as an investment advisor, investment advisor representative, broker-dealer, broker-dealer agent, and agent of the issuer." The Virginia Order alleged that Chang and his associated investment adviser "failed to disclose to or make any filings with the [Virginia Division of Securities and Retail Franchising] regarding the [Hawaii Order] whether on their Form ADV, Form U-4, or otherwise," in violation of the Virginia Commission's Rules Governing Investment Advisors. On April 25, 2022, In the Matter of WealthBridge Inc. and David S.Y. Chang, CRD Nos. 144198 and 5020283, the State of California Department of Financial Protection and Innovation entered, by consent, a final order ("California Order") declaring that Chang is "barred from any position of employment, management or control of any investment adviser, broker-dealer, or commodity adviser." The California Order found that Chang and his associated investment adviser "failed to timely disclose" the Hawaii Order and Virginia Order in their required filings.
Resolution
Order
Bar
Bar (Permanent)
Registration Capacities Affected
association with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO
Duration
Indefinite
Start Date
1/23/2023
Registration Capacities Affected
Participating in any offering of a penny stock
Duration
Indefinite
Start Date
1/23/2023
