STRATI v. PROVIDENCE HEALTH & REHAB CENTER, LLC

UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES ACT OF 1933 
Release No. 11010 / November 24, 2021   
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 5914 / November 24, 2021 
 
INVESTMENT COMPANY ACT OF 1940 
Release No. 34423 / November 24, 2021  
 
ADMINISTRATIVE PROCEEDING 
File No. 3-20664 
 
 
In the Matter of 
 
 UPRIGHT  
 FINANCIAL CORP.  
 and  
 DAVID YOW SHANG CHIUEH 
 
Respondents. 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO 8A OF THE SECURITIES 
ACT OF 1933, SECTIONS 203(e), 203(f) AND 
203(k) OF THE INVESTMENT ADVISERS 
ACT OF 1940, AND SECTION 9(f) OF THE 
INVESTMENT COMPANY ACT OF 1940, 
MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER 
  
I. 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that public administrative and cease-and-desist proceedings be, and hereby are, 
instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”), Sections 203(e), 
203(f) and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”), and Section 9(f) of the 
Investment Company Act of 1940 (“Investment Company Act”) against Upright Financial Corp. 
(“Upright”) and David Yow Shang Chiueh (“Chiueh”) (together, “Respondents”).   
II. 
 In anticipation of the institution of these proceedings, Respondents have submitted Offers 
of Settlement (the “Offers”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over them and the subject matter of these 
proceedings, which are admitted, Respondents consent to the entry of this Order Instituting 
Administrative and Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 
1933, Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, and Section 9(f) 

 
 
2 
of the Investment Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and 
A Cease-and-Desist Order (“Order”), as set forth below. 
III. 
 On the basis of this Order and Respondents’ Offers, the Commission finds
1
 that:  
Summary 
1. These proceedings arise from Upright’s and Chiueh’s management of Upright 
Growth Fund (“UPUPX”), a series of Upright Investments Trust (“Upright Trust”), a registered 
investment company (“RIC”).   
2. From at least July 1, 2017 and continuing through June 30, 2020, Upright, as 
UPUPX’s investment adviser, and Chiueh, as UPUPX’s portfolio manager, made investments for 
UPUPX that were inconsistent with (i) UPUPX’s classification as a diversified investment 
company, and (ii) UPUPX’s fundamental policy with respect to industry concentration as disclosed 
in its registration statement.  Upright and Chiueh also caused Upright Trust to incorrectly state in 
certain filings, including in shareholder reports and certain versions of its registration statement, that 
UPUPX operated in compliance with these fundamental policies when in fact it was not doing so.   
3. In addition, between July 2017 and June 30, 2020, Upright, as Upright Trust’s fund 
administrator, miscalculated UPUPX current net asset value (“NAV”), in some instances 
overstating or understating UPUPX’s NAV by over 15%.   
Respondents 
4. Respondent Upright is a New Jersey corporation with its principal place of business 
in East Hanover, New Jersey.  Upright has been registered with the Commission as an investment 
adviser since March 1991.  In its most recent amendment to its Form ADV, filed January 15, 2021, 
Upright reported over $68 million in regulatory assets under management across 48 advisory 
accounts, including Upright Trust, a RIC.      
5. Respondent Chiueh resides in East Hanover, New Jersey and is Upright’s founder, 
owner, President and Chief Compliance Officer.  Chiueh is also the Chief Executive Officer, 
portfolio manager and a trustee of Upright Trust.  
 
 
 
                                                 
1
  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any 
other person or entity in this or any other proceeding.  

 
 
3 
Other Entities 
6. Upright Trust is a Delaware business trust formed by Chiueh in Delaware in 1998.  
Upright Trust has been registered as an open-end investment company with the Commission since 
April 1998.  Upright Trust consists of three series funds, including Upright Growth Fund. 
7. Upright Growth Fund (or “UPUPX”) is a series of Upright Trust that operates as 
an open-end, management investment company, otherwise known as a mutual fund.  Upright 
Growth Fund’s NASDAQ ticker is UPUPX.  As of September 2020, the date of Upright Trust’s 
most recent annual report, UPUPX held net assets of $14.2 million. 
Facts 
Upright and Chiueh Failed to Operate UPUPX as a Diversified Fund  
and Excessively Concentrated Its Portfolio in One Industry 
 
Fund Diversification and Concentration Policies Generally 
 
8. Pursuant to Investment Company Act Section 5(b), a RIC that classifies itself as a 
management company under Investment Company Act Section 4(3) is either a “diversified 
company” or “non-diversified company.”  A “diversified company” must comply with certain 
specific requirements, including for example that it must maintain 75% of its total assets in cash, 
Government securities, securities of other investment companies, and securities of other issuers 
limited in respect to any one issuer to an amount no greater in value than 5% of the value of the 
total assets of the management company, and not more than 10% of the outstanding voting 
shares of the issuer. 
 
9 Investment Company Act Section 8(b)(1) requires that a RIC file a registration 
statement with the Commission that includes a recital of the RIC’s policies, including, among 
other things, whether it is a diversified or non-diversified fund and to the extent it engages in 
concentrating investments in a particular industry or group of industries.   
 
10. Pursuant to Investment Company Act Section 13(a)(1) and 13(a)(3), respectively, 
no RIC shall, unless authorized by the vote of a majority of its outstanding voting securities:  
change its sub-classification from a diversified to a non-diversified management company or 
deviate from its policy in respect of concentration of investments in any particular industry or 
group of industries as recited in its registration statement. 
 
Upright and Chiueh Caused UPUPX to Deviate From its Fundamental Investment Limitations 
 
11. Since Upright Trust’s inception in 1998 and continuing through June 18, 2019, 
UPUPX stated in its Statements of Additional Information (“SAIs”) (which were incorporated by 
reference into its prospectuses) and annual and semi-annual reports that UPUPX operated as a 
“diversified mutual fund” or as a “diversified investment portfolio” (“Diversification Policy”).  
UPUPX’s SAIs also stated that this was a fundamental policy of UPUPX – meaning that it 

 
 
4 
“cannot be changed without approval by a ‘majority of the outstanding voting securities’ . . . of 
the Fund.”. 
 
12. Similarly, Upright Trust established as a fundamental policy in its registration 
statements that UPUPX would not invest “more than 25% of its total assets in securities of 
companies principally engaged in any one industry” (the “Concentration Policy”).    
 
13. However, beginning in July 2017 and continuing at various times through 
December 2017, Chiueh, as UPUPX’s portfolio manager, implemented a put option strategy that 
caused UPUPX to deviate from its fundamental policies with respect to diversification and 
concentration.  Starting in August 2017, UPUPX purchased large amounts of shares of the 
securities underlying the put options, which regularly caused UPUPX’s portfolio to hold over 
25% of its total assets in the securities of a single issuer (and therefore, of a single industry in 
violation of both the Diversification and Concentration Policies).      
 
14. For example, on August 18, 2017, following the exercise of put options that 
UPUPX wrote on July 10, 2017 and July 27, 2017, UPUPX purchased $10,997,000 of the 
securities of a single pharmaceuticals issuer, which amounted to 53.90% of UPUPX’s total 
assets.  Similarly, on November 13, 2017, following the exercise of put options that UPUPX 
wrote in August 2017 and September 2017, UPUPX purchased $2,321,200 of the securities of a 
single pharmaceuticals issuer, which increased UPUPX’s holdings in the issuer to 27.67% of its 
total assets.  After UPUPX’s put options strategy ceased in December 2017, Upright and Chiueh 
caused UPUPX to continue to hold certain of the positions it has purchased as a result of the 
strategy.  From mid-2017 through June 30, 2020 (the “Relevant Period”), UPUPX routinely held 
more than 25% of its assets in securities of a single issuer.    
   
15. The chart below illustrates Upright’s failure to abide by UPUPX’s Diversification 
and Concentration Policies.  Specifically, the chart identifies the percentage of UPUPX’s total 
assets that were overly-concentrated in one industry, and the percentage of total assets invested 
in positions that caused UPUPX to be non-diversified (but that were not excessively 
concentrated in one industry).  Based on UPUPX’s average monthly position sizes, UPUPX did 
not operate as a diversified management company and exceeded UPUPX’s 25% concentration 
limit for each month from July 2017 through June 2020. 
 
 

 
 
5 
 
  

 
 
6 
Upright Trust Inaccurately Stated that UPUPX was Diversified and that  
UPUPX Would Follow the Concentration Policy  
 
16. During the Relevant Period, Upright and Chiueh prepared and filed Upright 
Trust’s filings with the Commission, including its prospectuses, SAIs, and annual and semi-
annual reports. 
 
17. Despite UPUPX operating as a non-diversified fund, Upright Trust’s September 
30, 2017 annual report (which Upright Trust filed with the Commission on January 17, 2018 and 
which Upright and Chiueh mailed to UPUPX shareholders) incorrectly stated that “[t]the Trust 
presently consists of one diversified investment portfolio, Upright Growth Fund.”  Similarly, on 
June 18, 2019, Upright and Chiueh caused Upright Trust to file a semi-annual report that stated 
that Upright Trust “presently consists of one diversified investment portfolio, Upright Growth 
Fund.” 
 
18. In addition, despite UPUPX’s then ongoing deviation from its Concentration 
Policy during the Relevant Period, Upright Trust’s SAIs during the Relevant Period stated that 
UPUPX “may not ... [i]nvest more than 25% of its total assets in securities of companies 
principally engaged in any one industry.” 
 
Upright and Chiueh Caused Upright Trust to Conduct an Improper Proxy Vote  
 
19. On August 10, 2018, the Board of Trustees of Upright Trust solicited proxy votes 
from a majority of UPUPX’s outstanding shareholders to approve a change in UPUPX’s sub-
classification from a diversified company to a non-diversified company.  UPUPX, however, did 
not file a preliminary copy of the proxy statement with the Commission at least 10 days prior to 
the date definitive copies of the proxy were first sent to fund shareholders.  In addition, the proxy 
solicitation sent to shareholders omitted to state that UPUPX had been operating as a non-
diversified company prior to the date of the proxy vote. 
 
Upright Miscalculated UPUPX’s NAV 
 
20. From Upright Trust’s inception, Upright has been Upright Trust’s fund 
administrator as well as its investment adviser.  As fund administrator, Upright was responsible 
for calculating UPUPX’s NAV.  Between July 2017 and June 30, 2020, Upright, as UPUPX’s 
administrator, miscalculated UPUPX’s NAV.  During this period, UPUPX engaged in numerous 
sales, redemptions, and repurchases of its redeemable securities, including on days with NAV 
errors.       
 
21. At some point prior to July 1, 2017, Chiueh entered UPUPX’s portfolio holdings 
information into a saved profile on an online search engine’s financial information website (the 
“Financial Website”).  When calculating UPUPX’s NAV, Upright, at Chiueh’s direction, 
retrieved pricing data from the Financial Website.  Chiueh, however, did not regularly update the 
portfolio holdings information, and the Financial Website did not have the capability to 

 
 
7 
automatically update UPUPX’s profile with accurate information concerning the number of 
shares of certain securities UPUPX held in its portfolio.  For example, on July 16, 2017, an ETF 
position in UPUPX’s portfolio conducted a 4:1 reverse stock split, but UPUPX’s profile on the 
Financial Website continued to list UPUPX’s original number of shares.  Similarly, when Chiueh 
effected transactions in UPUPX’s portfolio that changed the number of an issuer’s shares in the 
portfolio, Chiueh did not regularly update UPUPX’s profile on the Financial Website with the 
new number of shares.  The Financial Website also did not provide daily options prices, nor did 
it have the capability to provide information about the cash balances in UPUPX’s broker-dealer 
and custodian bank accounts.  All of this information would have been available to Upright had 
it accessed UPUPX’s broker-dealer and custodian bank accounts on a daily basis. 
   
22. Because Upright did not update the holdings information used to calculate 
UPUPX’s NAV, Upright calculated incorrect NAVs for UPUPX during the Relevant Period.  
For example, on August 8, 2017 and August 14, 2017, Upright used inaccurate options pricing 
data when calculating UPUPX’s NAV, which resulted in Upright reporting NAVs that were 
overstated by $1.13 (16.59%) and $0.74 (8.11%), respectively, for those days.  Similarly, 
between December 13, 2018 and January 4, 2019, Upright under-calculated UPUPX’s NAV by 
over 5% 15 times due to its use of inaccurate securities prices and amounts and inaccurate data 
regarding UPUPX’s cash balance.  On March 5, 2019, the Division of Examinations staff issued 
a letter to Upright that identified deficiencies in Upright’s NAV calculation practices.  Despite 
being put on notice that deficiencies existed with its NAV calculation practices, Upright 
continued for several months to use the Financial Website to calculate NAVs for UPUPX and 
failed to identify and correct prior NAV errors.  
 
Compliance Deficiencies 
23. During the period of the violative conduct described above, Upright Trust 
maintained no written policies and procedures, and Upright failed to adopt and implement 
written policies and procedures reasonably designed to prevent violations of the Advisers Act 
and the rules thereunder in connection with (i) the accuracy of statements concerning Upright 
Trust’s investment policies in filings with the Commission and to UPUPX’s shareholders and 
prospective investors, (ii) operating UPUPX in a manner consistent with the Diversification 
Policy and Concentration Policy, and (iii) calculating UPUPX’s NAV.  Upright’s policies, for 
example, did not have any specific procedures on calculating the NAV, and there were no 
procedures designed to check the accuracy of filings by UPUPX.  
 
  

 
 
8 
Violations 
24. As a result of the conduct described above, Respondents willfully
2
 violated Sections 
17(a)(2) and 17(a)(3) of the Securities Act, which prohibit any person in the offer or sale of 
securities from obtaining money or property by means of any untrue statement of material fact or 
any omission to state a material fact necessary in order to make statements not misleading, and 
from engaging in any transaction, practice, or course of business which operates or would operate 
as a fraud or deceit on the purchaser in the offer or sale of securities, respectively.  Negligence is 
sufficient to establish violations of Sections 17(a)(2) and (3) of the Securities Act.  Aaron v. SEC, 
446 U.S. 680, 696-97 (1980).   
25. As a result of the conduct described above, Respondents willfully violated and 
caused Upright Trust’s violation of Investment Company Act Section 20(a) and Rule 20a-1(a) 
thereunder, which prohibits any person from soliciting any proxy except upon compliance with 
Regulation 14A under the Securities Exchange Act of 1934 (“Exchange Act”), Schedule 14A, and 
all other rules and regulations adopted pursuant to section 14(a) of the Exchange Act that would be 
applicable to such solicitation if it were made in respect of a security registered pursuant to Section 
12 of the Exchange Act. 
26. As a result of the conduct described above, Respondents willfully violated Section 
34(b) of the Investment Company Act which makes it unlawful for any person to make any untrue 
or misleading statement of material fact in any registration statement, application, report, account, 
record, or other document filed with the Commission under the Investment Company Act, or to 
omit from any such document any fact necessary in order to prevent the statements made therein 
from being materially misleading.  A violation of Section 34(b) does not require a finding of 
scienter.  In re Fundamental Portfolio Advisers, Inc., Investment Company Act Release No. 26099 
(July 15, 2003) (Commission Opinion). 
27.  As a result of the conduct described above, Respondents willfully violated Section 
206(2) of the Advisers Act, which makes it unlawful for any investment adviser, directly or 
indirectly, to “engage in any transaction, practice or course of business which operates as a fraud or 
deceit upon any client or prospective client.”  
28. As a result of the conduct described above, Respondents willfully violated Section 
206(4) of the Advisers Act and Rule 206(4)-8 thereunder, which makes it unlawful for any 
investment adviser to a pooled investment vehicle to make any untrue statement of a material fact 
or to omit to state a material fact necessary to make the statements made, in the light of the 
                                                 
2
  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act and Section 203(e) of 
the Advisers Act, “‘means no more than that the person charged with the duty knows what he is doing.’”  Wonsover 
v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).  There is 
no requirement that the actor “also be aware that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 
5, 8 (2d Cir. 1965).  The decision in The Robare Group, Ltd. v. SEC, which construed the term “willfully” for 
purposes of a differently structured statutory provision, does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 
2019) (setting forth the showing required to establish that a person has “willfully omit[ed]” material information 
from a required disclosure in violation of Section 207 of the Advisers Act). 

 
 
9 
circumstances under which they were made, not misleading, to any investor or prospective investor 
in the pooled investment vehicle.   
29. As a result of the conduct described above, Upright willfully violated, and Chiueh 
caused Upright’s violation of, Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder, 
which require a registered investment adviser to adopt and implement written compliance policies 
and procedures reasonably designed to prevent violations of the Advisers Act and the rules 
thereunder. 
30. As a result of the conduct described above, Respondents caused UPUPX’s violation 
of Investment Company Act Sections 13(a)(1), which requires that no RIC shall, unless authorized 
by the vote of a majority of its outstanding voting securities, change its sub-classification from a 
diversified to a non-diversified company. 
31. As a result of the conduct described above, Respondents caused UPUPX’s violation 
of Investment Company Act Section 13(a)(3), which requires that no RIC shall, unless authorized 
by the vote of a majority of its outstanding voting securities, deviate from its policy in respect of 
concentration of investments in any particular industry or group of industries as recited in its 
registration statement.   
32. As a result of the conduct described above, Respondents caused UPUPX’s violation 
of Investment Company Act Rule 22c-1, which prohibits registered investment companies, among 
others, from the sale, redemption, or repurchase of the investment company’s redeemable 
securities except at a price based on the current net asset value of such security.  
33. As a result of the conduct described above, Respondents caused Upright Trust’s 
violation of Rule 38a-1, which requires a RIC to adopt and implement written policies and 
procedures reasonably designed to prevent violations of the federal securities laws. 
Disgorgement and Civil Penalties 
34. The disgorgement and prejudgment interest ordered in Section IV, paragraph C. is 
consistent with equitable principles and does not exceed Upright’s net profits from its violations, 
and will be distributed to harmed investors to the extent feasible.  The Commission will hold funds 
paid pursuant to Section IV, paragraph C. in an account at the United States Treasury pending 
distribution.  Upon approval of the distribution final accounting by the Commission, any amounts 
remaining that are infeasible to return to investors, and any amounts returned to the Commission in 
the future that are infeasible to return to investors, may be transferred to the general fund of the 
U.S. Treasury, subject to Section 21F(g)(3) of the Exchange Act.   
Undertakings 
35. Independent Compliance Consultant.  
 
a. Upright has undertaken to retain, within 30 days of the date of the issuance 
of this Order, the services of an Independent Compliance Consultant 

 
 
10 
(“Consultant”) not unacceptable to the staff of the Commission.  The Consultant’s 
compensation and expenses shall be borne exclusively by Upright.  Upright shall 
require the Consultant to conduct a comprehensive review of, and recommend 
corrective measures concerning, Upright’s compliance and other policies and 
procedures with respect to:  
 
i. Monitoring its mutual fund clients’ compliance with the 
requirements of the mutual fund clients’ classifications, 
sub-classifications and investment policies; 
ii. Proxy solicitation; 
iii. NAV calculation and publication;  
iv. Reconciliation of data with fund broker-dealers, custodians 
and transfer agents;  
v. Monitoring of the performance of administrative and 
professional services rendered to its mutual fund clients by 
other service providers;  
vi. Coordination of fund audits;  
vii. Communications with clients, auditors, and others about 
possible failures to comport with fund governing 
documents or possible failures to comply with the law by 
clients or investment advisers; and  
viii. Detecting and addressing fraud.  
 
b. Upright shall provide to the Commission staff, within thirty (30) days of 
retaining the Consultant, a copy of an engagement letter detailing the Consultant’s 
responsibilities, which shall include the review described in paragraph 35.a. 
  
c. At the end of the review, which in no event shall be more than ninety (90) 
days after the date the Consultant is retained by Upright, Upright shall require the 
Consultant to submit an Initial Report to Upright and to the Commission staff.  
The Initial Report shall address the items in paragraph 35.a, and shall describe the 
review performed, the conclusions reached, the Consultant’s recommendations for 
changes in, or improvements to, Upright’s policies and procedures, and a 
procedure for implementing the recommended changes in, or improvements to, 
those policies and procedures.  
 
d. Upright shall adopt all recommendations contained in the Initial Report 
within ninety (90) days of receipt; provided, however, that within thirty (30) days 
of Upright’s receipt of the Initial Report, Upright may, in writing, advise the 
Consultant and the Commission staff of any recommendations that it considers 
unnecessary, unduly burdensome, impractical, or inappropriate.  With respect to 
any such recommendation, Upright need not adopt that recommendation at that 
time, but shall propose in writing an alternative policy, procedure, or system 
designed to achieve the same objective or purpose.  The Consultant shall evaluate 

 
 
11 
any alternative procedure proposed by Upright.  As to any recommendation on 
which Upright and the Consultant do not agree, such parties shall attempt in good 
faith to reach an agreement within thirty (30) days after Upright provides the 
alternative procedures described above. In the event that Upright and the 
Consultant are unable to agree on an alternative proposal, Upright and the 
Consultant shall jointly confer with the Commission staff to resolve the matter.  In 
the event that, after conferring with the Commission staff, Upright and the 
Consultant are unable to agree on an alternative proposal, Upright will abide by 
the recommendations of the Consultant.  
 
e. Within two hundred seventy (270) days after the date of the issuance of 
this Order, Upright shall require the Consultant to complete its review and submit 
a written final report to Commission staff.  The Final Report shall describe the 
review made of Upright’s compliance policies and procedures; set forth the 
conclusions reached and recommendations made by the Consultant, as well as any 
proposals made by Upright; and describe how Upright is implementing the 
Consultant’s final recommendations.  
 
f. Upright shall take all necessary and appropriate steps to adopt and 
implement all recommendations contained in the Consultant’s Final Report.  The 
date of completion of the undertakings shall, in no event, be later than the one 
year anniversary from the date of issuance of this Order.  
 
g. For good cause shown and upon timely application by the Consultant or 
Upright, the Commission’s staff may extend any of the deadlines set forth in these 
undertakings.  
 
h. To ensure the independence of the Consultant, Upright (i) shall not have 
the authority to terminate the Consultant or substitute another consultant for the 
initial Consultant, without the prior written approval of the Commission’s staff; 
(ii) shall compensate the Consultant and persons engaged to assist the Consultant 
for services rendered pursuant to the Order at their reasonable and customary 
rates; and (iii) shall not invoke the attorney-client or any other doctrine or 
privilege to prevent the Consultant from communicating with or transmitting any 
information, reports, or documents to the Commission’s staff.  
 
i. Upright shall require the Consultant to enter into an agreement providing 
that for the period of the engagement and for a period of two years from 
completion of the engagement, the Consultant shall not enter into any 
employment, consultant, attorney-client, auditing, or other professional 
relationship with Upright, or any of its present or former affiliates, directors, 
officers, employees, or agents acting in their capacity as such.  The agreement 
will also provide that the Consultant will require that any firm with which he/she 
is affiliated or of which he/she is a member, and any person engaged to assist the 

 
 
12 
Consultant in the performance of his or her duties under this Order shall not, 
without prior written consent of the Commission staff, enter into any 
employment, consultant, attorney-client, auditing, or other professional 
relationship with Upright, or any of its present or former affiliates, directors, 
officers, employees, or agents acting in their capacity as such for the period of the 
engagement and for a period of two years after the engagement.  
 
The reports by the independent consultant will likely include confidential 
financial, proprietary, competitive business or commercial information.  Public 
disclosure of the reports could discourage cooperation, impede pending or 
potential government investigations or undermine the objectives of the reporting 
requirement.  For these reasons, among others, the reports and the contents 
thereof are intended to remain and shall remain non-public, except (1) pursuant to 
court order, (2) as agreed to by the parties in writing, (3) to the extent that the 
Commission determines in its sole discretion that disclosure would be in 
furtherance of the Commission’s discharge of its duties and responsibilities, or (4) 
is otherwise required by law. 
 
 
36. Within 30 days of the entry of this Order, Upright shall notify affected investors 
(i.e., those former and current Upright clients from July 1, 2017 through June 30, 2020, and those 
former and current shareholders of any series of Upright Trust who owned shares of any series of 
Upright Trust and any time from July 1, 2017 through June 30, 2020 (hereinafter, “affected 
investors”)) of the settlement terms of this Order by sending a copy of this Order to each affected 
investor via mail, email, or such other method not unacceptable to the Commission staff, 
together with a cover letter in a form not unacceptable to the Commission staff. 
 
37. Upright shall certify, in writing, compliance with the undertakings set forth above. 
The certification shall identify the undertakings, provide written evidence of compliance in the 
form of a narrative, and be supported by exhibits sufficient to demonstrate compliance.  The 
Commission’s staff may make reasonable requests for further evidence of compliance, and 
Upright agrees to provide such evidence.  The certification and supporting material shall be 
submitted to Andrew B. Dean, Assistant Regional Director, Division of Enforcement, Securities 
and Exchange Commission, 200 Vesey Street (Brookfield Place), 4
th
 Floor, New York, NY 
10281, with a copy to the Office of the Chief Counsel of the Enforcement Division, no later than 
sixty (60) days from the date of completion of the undertakings. 
 
IV. 
 In view of the foregoing, the Commission deems it appropriate, and in the public interest to 
impose the sanctions agreed to in Respondents’ Offers. 
 Accordingly, pursuant to Section 8A of the Securities Act, Sections 203(e), 203(f) and 
203(k) of the Advisers Act, and Sections 9(b) and 9(f) of the Investment Company Act, it is hereby 
ORDERED that: 

 
 
13 
 A. Respondents cease and desist from committing or causing any violations and any 
future violations of Sections 17(a)(2) and 17(3) of the Securities Act, Sections 13(a)(1), 13(a)(3), 
20(a) and 34(b) of the Investment Company Act and Rules 20a-1(a), 22c-1 and 38a-1 promulgated 
thereunder, and Sections 206(2) and 206(4) of the Advisers Act and Rules 206(4)-7 and 206(4)-8 
promulgated thereunder. 
B. Respondents are censured. 
C. Respondent Upright shall pay disgorgement of $390,704.92 and $36,505.10 in 
prejudgment interest thereon to the Securities and Exchange Commission. 
 
D. Respondents shall pay, jointly and severally, a civil penalty of $90,000 to the 
Securities and Exchange Commission.   
 
Payment of the above amounts shall be made in the following installments: (1) $181,023.02 shall 
be paid within 10 days of the entry of this Order; (2) $103,442 shall be paid within 120 days of the 
entry of this Order; (3) $103,442 shall be paid within 240 days of the entry of this Order; and (4) 
$129,303 shall be paid within 360 days of the entry of this Order.  Payments shall be applied first 
to post-order interest, which accrues pursuant to SEC Rule of Practice 600 and pursuant to 31 
U.S.C. § 3717.  Prior to making the final payment set forth herein, Respondents shall contact the 
staff of the Commission for the amount due.  If Respondents fail to make any payment by the date 
agreed and/or in the amount agreed according to the schedule set forth above, all outstanding 
payments under this Order, including post-order interest, minus any payments made, shall become 
due and payable immediately at the discretion of the staff of the Commission without further 
application to the Commission. 
 
(1) Payment must be made in one of the following ways:   
 
(a) Respondents may transmit payment electronically to the 
Commission, which will provide detailed ACH transfer/Fedwire 
instructions upon request;  
 
(b) Respondents may make direct payment from a bank account via 
Pay.gov through the SEC website at 
http://www.sec.gov/about/offices/ofm.htm; or  
 
(c) Respondents may pay by certified check, bank cashier’s check, or 
United States postal money order, made payable to the Securities 
and Exchange Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 

 
 
14 
Payments by check or money order must be accompanied by a cover 
letter identifying Upright Financial Corp. and David Yow Shang 
Chiueh as Respondents in these proceedings, and the file number of 
these proceedings; a copy of the cover letter and check or money 
order must be sent to Andrew B. Dean, Assistant Regional Director, 
Division of Enforcement, Securities and Exchange Commission, 
200 Vesey Street (Brookfield Place), 4
th
 Floor, New York, NY 
10281.   
 
(2) Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, 
a Fair Fund is created for the penalties, disgorgement, and prejudgment 
interest referenced in this Section IV, paragraphs C and D.  Amounts 
ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax 
purposes.  To preserve the deterrent effect of the civil penalty, Respondents 
agrees that in any Related Investor Action, they shall not argue that they are 
entitled to, nor shall they benefit by, offset or reduction of any award of 
compensatory damages by the amount of any part of Respondents’ payment 
of a civil penalty in this action (“Penalty Offset”).  If the court in any 
Related Investor Action grants such a Penalty Offset, Respondents agree 
that they shall, within 30 days after entry of a final order granting the 
Penalty Offset, notify the Commission’s counsel in this action and pay the 
amount of the Penalty Offset to the Securities and Exchange Commission.  
Such a payment shall not be deemed an additional civil penalty and shall not 
be deemed to change the amount of the civil penalty imposed in this 
proceeding.  For purposes of this paragraph, a “Related Investor Action” 
means a private damages action brought against Respondents by or on 
behalf of one or more investors based on substantially the same facts as 
alleged in the Order instituted by the Commission in this proceeding. 
 
E. Respondent Upright shall comply with the undertakings enumerated in Section III, 
paragraph 35 through 37 above.   
  
V. 
 It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 
523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 
Respondent Chiueh, and further, any debt for disgorgement, prejudgment interest, civil penalty or 
other amounts due by Respondent Chiueh under this Order or any other judgment, order, consent 
order, decree or settlement agreement entered in connection with this proceeding, is a debt for the 

 
 
15 
violation by Respondent Chiueh of the federal securities laws or any regulation or order issued 
under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 
 By the Commission. 
 
 
 
       Vanessa A. Countryman 
       Secretary 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES ACT OF 1933 

Release No. 11010 / November 24, 2021   

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 5914 / November 24, 2021 

 

INVESTMENT COMPANY ACT OF 1940 

Release No. 34423 / November 24, 2021  

 

ADMINISTRATIVE PROCEEDING 

File No. 3-20664 

 

 

In the Matter of 

 

 UPRIGHT  

 FINANCIAL CORP.  

 and  

 DAVID YOW SHANG CHIUEH 

 

Respondents. 

 

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS, 

PURSUANT TO 8A OF THE SECURITIES 

ACT OF 1933, SECTIONS 203(e), 203(f) AND 

203(k) OF THE INVESTMENT ADVISERS 

ACT OF 1940, AND SECTION 9(f) OF THE 

INVESTMENT COMPANY ACT OF 1940, 

MAKING FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS AND A CEASE-

AND-DESIST ORDER 

  

I. 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”), Sections 203(e), 

203(f) and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”), and Section 9(f) of the 

Investment Company Act of 1940 (“Investment Company Act”) against Upright Financial Corp. 

(“Upright”) and David Yow Shang Chiueh (“Chiueh”) (together, “Respondents”).   

II. 

 In anticipation of the institution of these proceedings, Respondents have submitted Offers 

of Settlement (the “Offers”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over them and the subject matter of these 

proceedings, which are admitted, Respondents consent to the entry of this Order Instituting 

Administrative and Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 

1933, Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, and Section 9(f) 



 

 

2 

of the Investment Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and 

A Cease-and-Desist Order (“Order”), as set forth below. 

III. 

 On the basis of this Order and Respondents’ Offers, the Commission finds1 that:  

Summary 

1. These proceedings arise from Upright’s and Chiueh’s management of Upright 

Growth Fund (“UPUPX”), a series of Upright Investments Trust (“Upright Trust”), a registered 

investment company (“RIC”).   

2. From at least July 1, 2017 and continuing through June 30, 2020, Upright, as 

UPUPX’s investment adviser, and Chiueh, as UPUPX’s portfolio manager, made investments for 

UPUPX that were inconsistent with (i) UPUPX’s classification as a diversified investment 

company, and (ii) UPUPX’s fundamental policy with respect to industry concentration as disclosed 

in its registration statement.  Upright and Chiueh also caused Upright Trust to incorrectly state in 

certain filings, including in shareholder reports and certain versions of its registration statement, that 

UPUPX operated in compliance with these fundamental policies when in fact it was not doing so.   

3. In addition, between July 2017 and June 30, 2020, Upright, as Upright Trust’s fund 

administrator, miscalculated UPUPX current net asset value (“NAV”), in some instances 

overstating or understating UPUPX’s NAV by over 15%.   

Respondents 

4. Respondent Upright is a New Jersey corporation with its principal place of business 

in East Hanover, New Jersey.  Upright has been registered with the Commission as an investment 

adviser since March 1991.  In its most recent amendment to its Form ADV, filed January 15, 2021, 

Upright reported over $68 million in regulatory assets under management across 48 advisory 

accounts, including Upright Trust, a RIC.      

5. Respondent Chiueh resides in East Hanover, New Jersey and is Upright’s founder, 

owner, President and Chief Compliance Officer.  Chiueh is also the Chief Executive Officer, 

portfolio manager and a trustee of Upright Trust.  

 

 

 

                                                 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding on any 

other person or entity in this or any other proceeding.  



 

 

3 

Other Entities 

6. Upright Trust is a Delaware business trust formed by Chiueh in Delaware in 1998.  

Upright Trust has been registered as an open-end investment company with the Commission since 

April 1998.  Upright Trust consists of three series funds, including Upright Growth Fund. 

7. Upright Growth Fund (or “UPUPX”) is a series of Upright Trust that operates as 

an open-end, management investment company, otherwise known as a mutual fund.  Upright 

Growth Fund’s NASDAQ ticker is UPUPX.  As of September 2020, the date of Upright Trust’s 

most recent annual report, UPUPX held net assets of $14.2 million. 

Facts 

Upright and Chiueh Failed to Operate UPUPX as a Diversified Fund  

and Excessively Concentrated Its Portfolio in One Industry 

 

Fund Diversification and Concentration Policies Generally 

 

8. Pursuant to Investment Company Act Section 5(b), a RIC that classifies itself as a 

management company under Investment Company Act Section 4(3) is either a “diversified 

company” or “non-diversified company.”  A “diversified company” must comply with certain 

specific requirements, including for example that it must maintain 75% of its total assets in cash, 

Government securities, securities of other investment companies, and securities of other issuers 

limited in respect to any one issuer to an amount no greater in value than 5% of the value of the 

total assets of the management company, and not more than 10% of the outstanding voting 

shares of the issuer. 

 

9 Investment Company Act Section 8(b)(1) requires that a RIC file a registration 

statement with the Commission that includes a recital of the RIC’s policies, including, among 

other things, whether it is a diversified or non-diversified fund and to the extent it engages in 

concentrating investments in a particular industry or group of industries.   

 

10. Pursuant to Investment Company Act Section 13(a)(1) and 13(a)(3), respectively, 

no RIC shall, unless authorized by the vote of a majority of its outstanding voting securities:  

change its sub-classification from a diversified to a non-diversified management company or 

deviate from its policy in respect of concentration of investments in any particular industry or 

group of industries as recited in its registration statement. 

 

Upright and Chiueh Caused UPUPX to Deviate From its Fundamental Investment Limitations 

 

11. Since Upright Trust’s inception in 1998 and continuing through June 18, 2019, 

UPUPX stated in its Statements of Additional Information (“SAIs”) (which were incorporated by 

reference into its prospectuses) and annual and semi-annual reports that UPUPX operated as a 

“diversified mutual fund” or as a “diversified investment portfolio” (“Diversification Policy”).  

UPUPX’s SAIs also stated that this was a fundamental policy of UPUPX – meaning that it 



 

 

4 

“cannot be changed without approval by a ‘majority of the outstanding voting securities’ . . . of 

the Fund.”. 

 

12. Similarly, Upright Trust established as a fundamental policy in its registration 

statements that UPUPX would not invest “more than 25% of its total assets in securities of 

companies principally engaged in any one industry” (the “Concentration Policy”).    

 

13. However, beginning in July 2017 and continuing at various times through 

December 2017, Chiueh, as UPUPX’s portfolio manager, implemented a put option strategy that 

caused UPUPX to deviate from its fundamental policies with respect to diversification and 

concentration.  Starting in August 2017, UPUPX purchased large amounts of shares of the 

securities underlying the put options, which regularly caused UPUPX’s portfolio to hold over 

25% of its total assets in the securities of a single issuer (and therefore, of a single industry in 

violation of both the Diversification and Concentration Policies).      

 

14. For example, on August 18, 2017, following the exercise of put options that 

UPUPX wrote on July 10, 2017 and July 27, 2017, UPUPX purchased $10,997,000 of the 

securities of a single pharmaceuticals issuer, which amounted to 53.90% of UPUPX’s total 

assets.  Similarly, on November 13, 2017, following the exercise of put options that UPUPX 

wrote in August 2017 and September 2017, UPUPX purchased $2,321,200 of the securities of a 

single pharmaceuticals issuer, which increased UPUPX’s holdings in the issuer to 27.67% of its 

total assets.  After UPUPX’s put options strategy ceased in December 2017, Upright and Chiueh 

caused UPUPX to continue to hold certain of the positions it has purchased as a result of the 

strategy.  From mid-2017 through June 30, 2020 (the “Relevant Period”), UPUPX routinely held 

more than 25% of its assets in securities of a single issuer.    

   

15. The chart below illustrates Upright’s failure to abide by UPUPX’s Diversification 

and Concentration Policies.  Specifically, the chart identifies the percentage of UPUPX’s total 

assets that were overly-concentrated in one industry, and the percentage of total assets invested 

in positions that caused UPUPX to be non-diversified (but that were not excessively 

concentrated in one industry).  Based on UPUPX’s average monthly position sizes, UPUPX did 

not operate as a diversified management company and exceeded UPUPX’s 25% concentration 

limit for each month from July 2017 through June 2020. 
 

 



 

 

5 

 
  



 

 

6 

Upright Trust Inaccurately Stated that UPUPX was Diversified and that  

UPUPX Would Follow the Concentration Policy  

 

16. During the Relevant Period, Upright and Chiueh prepared and filed Upright 

Trust’s filings with the Commission, including its prospectuses, SAIs, and annual and semi-

annual reports. 

 

17. Despite UPUPX operating as a non-diversified fund, Upright Trust’s September 

30, 2017 annual report (which Upright Trust filed with the Commission on January 17, 2018 and 

which Upright and Chiueh mailed to UPUPX shareholders) incorrectly stated that “[t]the Trust 

presently consists of one diversified investment portfolio, Upright Growth Fund.”  Similarly, on 

June 18, 2019, Upright and Chiueh caused Upright Trust to file a semi-annual report that stated 

that Upright Trust “presently consists of one diversified investment portfolio, Upright Growth 

Fund.” 

 

18. In addition, despite UPUPX’s then ongoing deviation from its Concentration 

Policy during the Relevant Period, Upright Trust’s SAIs during the Relevant Period stated that 

UPUPX “may not … [i]nvest more than 25% of its total assets in securities of companies 

principally engaged in any one industry.” 

 

Upright and Chiueh Caused Upright Trust to Conduct an Improper Proxy Vote  

 

19. On August 10, 2018, the Board of Trustees of Upright Trust solicited proxy votes 

from a majority of UPUPX’s outstanding shareholders to approve a change in UPUPX’s sub-

classification from a diversified company to a non-diversified company.  UPUPX, however, did 

not file a preliminary copy of the proxy statement with the Commission at least 10 days prior to 

the date definitive copies of the proxy were first sent to fund shareholders.  In addition, the proxy 

solicitation sent to shareholders omitted to state that UPUPX had been operating as a non-

diversified company prior to the date of the proxy vote. 

 

Upright Miscalculated UPUPX’s NAV 

 

20. From Upright Trust’s inception, Upright has been Upright Trust’s fund 

administrator as well as its investment adviser.  As fund administrator, Upright was responsible 

for calculating UPUPX’s NAV.  Between July 2017 and June 30, 2020, Upright, as UPUPX’s 

administrator, miscalculated UPUPX’s NAV.  During this period, UPUPX engaged in numerous 

sales, redemptions, and repurchases of its redeemable securities, including on days with NAV 

errors.       

 

21. At some point prior to July 1, 2017, Chiueh entered UPUPX’s portfolio holdings 

information into a saved profile on an online search engine’s financial information website (the 

“Financial Website”).  When calculating UPUPX’s NAV, Upright, at Chiueh’s direction, 

retrieved pricing data from the Financial Website.  Chiueh, however, did not regularly update the 

portfolio holdings information, and the Financial Website did not have the capability to 



 

 

7 

automatically update UPUPX’s profile with accurate information concerning the number of 

shares of certain securities UPUPX held in its portfolio.  For example, on July 16, 2017, an ETF 

position in UPUPX’s portfolio conducted a 4:1 reverse stock split, but UPUPX’s profile on the 

Financial Website continued to list UPUPX’s original number of shares.  Similarly, when Chiueh 

effected transactions in UPUPX’s portfolio that changed the number of an issuer’s shares in the 

portfolio, Chiueh did not regularly update UPUPX’s profile on the Financial Website with the 

new number of shares.  The Financial Website also did not provide daily options prices, nor did 

it have the capability to provide information about the cash balances in UPUPX’s broker-dealer 

and custodian bank accounts.  All of this information would have been available to Upright had 

it accessed UPUPX’s broker-dealer and custodian bank accounts on a daily basis. 

   

22. Because Upright did not update the holdings information used to calculate 

UPUPX’s NAV, Upright calculated incorrect NAVs for UPUPX during the Relevant Period.  

For example, on August 8, 2017 and August 14, 2017, Upright used inaccurate options pricing 

data when calculating UPUPX’s NAV, which resulted in Upright reporting NAVs that were 

overstated by $1.13 (16.59%) and $0.74 (8.11%), respectively, for those days.  Similarly, 

between December 13, 2018 and January 4, 2019, Upright under-calculated UPUPX’s NAV by 

over 5% 15 times due to its use of inaccurate securities prices and amounts and inaccurate data 

regarding UPUPX’s cash balance.  On March 5, 2019, the Division of Examinations staff issued 

a letter to Upright that identified deficiencies in Upright’s NAV calculation practices.  Despite 

being put on notice that deficiencies existed with its NAV calculation practices, Upright 

continued for several months to use the Financial Website to calculate NAVs for UPUPX and 

failed to identify and correct prior NAV errors.  

 

Compliance Deficiencies 

23. During the period of the violative conduct described above, Upright Trust 

maintained no written policies and procedures, and Upright failed to adopt and implement 

written policies and procedures reasonably designed to prevent violations of the Advisers Act 

and the rules thereunder in connection with (i) the accuracy of statements concerning Upright 

Trust’s investment policies in filings with the Commission and to UPUPX’s shareholders and 

prospective investors, (ii) operating UPUPX in a manner consistent with the Diversification 

Policy and Concentration Policy, and (iii) calculating UPUPX’s NAV.  Upright’s policies, for 

example, did not have any specific procedures on calculating the NAV, and there were no 

procedures designed to check the accuracy of filings by UPUPX.  

 

  



 

 

8 

Violations 

24. As a result of the conduct described above, Respondents willfully2 violated Sections 

17(a)(2) and 17(a)(3) of the Securities Act, which prohibit any person in the offer or sale of 

securities from obtaining money or property by means of any untrue statement of material fact or 

any omission to state a material fact necessary in order to make statements not misleading, and 

from engaging in any transaction, practice, or course of business which operates or would operate 

as a fraud or deceit on the purchaser in the offer or sale of securities, respectively.  Negligence is 

sufficient to establish violations of Sections 17(a)(2) and (3) of the Securities Act.  Aaron v. SEC, 

446 U.S. 680, 696-97 (1980).   

25. As a result of the conduct described above, Respondents willfully violated and 

caused Upright Trust’s violation of Investment Company Act Section 20(a) and Rule 20a-1(a) 

thereunder, which prohibits any person from soliciting any proxy except upon compliance with 

Regulation 14A under the Securities Exchange Act of 1934 (“Exchange Act”), Schedule 14A, and 

all other rules and regulations adopted pursuant to section 14(a) of the Exchange Act that would be 

applicable to such solicitation if it were made in respect of a security registered pursuant to Section 

12 of the Exchange Act. 

26. As a result of the conduct described above, Respondents willfully violated Section 

34(b) of the Investment Company Act which makes it unlawful for any person to make any untrue 

or misleading statement of material fact in any registration statement, application, report, account, 

record, or other document filed with the Commission under the Investment Company Act, or to 

omit from any such document any fact necessary in order to prevent the statements made therein 

from being materially misleading.  A violation of Section 34(b) does not require a finding of 

scienter.  In re Fundamental Portfolio Advisers, Inc., Investment Company Act Release No. 26099 

(July 15, 2003) (Commission Opinion). 

27.  As a result of the conduct described above, Respondents willfully violated Section 

206(2) of the Advisers Act, which makes it unlawful for any investment adviser, directly or 

indirectly, to “engage in any transaction, practice or course of business which operates as a fraud or 

deceit upon any client or prospective client.”  

28. As a result of the conduct described above, Respondents willfully violated Section 

206(4) of the Advisers Act and Rule 206(4)-8 thereunder, which makes it unlawful for any 

investment adviser to a pooled investment vehicle to make any untrue statement of a material fact 

or to omit to state a material fact necessary to make the statements made, in the light of the 

                                                 
2  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act and Section 203(e) of 

the Advisers Act, “‘means no more than that the person charged with the duty knows what he is doing.’”  Wonsover 

v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).  There is 

no requirement that the actor “also be aware that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 

5, 8 (2d Cir. 1965).  The decision in The Robare Group, Ltd. v. SEC, which construed the term “willfully” for 

purposes of a differently structured statutory provision, does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 

2019) (setting forth the showing required to establish that a person has “willfully omit[ed]” material information 

from a required disclosure in violation of Section 207 of the Advisers Act). 



 

 

9 

circumstances under which they were made, not misleading, to any investor or prospective investor 

in the pooled investment vehicle.   

29. As a result of the conduct described above, Upright willfully violated, and Chiueh 

caused Upright’s violation of, Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder, 

which require a registered investment adviser to adopt and implement written compliance policies 

and procedures reasonably designed to prevent violations of the Advisers Act and the rules 

thereunder. 

30. As a result of the conduct described above, Respondents caused UPUPX’s violation 

of Investment Company Act Sections 13(a)(1), which requires that no RIC shall, unless authorized 

by the vote of a majority of its outstanding voting securities, change its sub-classification from a 

diversified to a non-diversified company. 

31. As a result of the conduct described above, Respondents caused UPUPX’s violation 

of Investment Company Act Section 13(a)(3), which requires that no RIC shall, unless authorized 

by the vote of a majority of its outstanding voting securities, deviate from its policy in respect of 

concentration of investments in any particular industry or group of industries as recited in its 

registration statement.   

32. As a result of the conduct described above, Respondents caused UPUPX’s violation 

of Investment Company Act Rule 22c-1, which prohibits registered investment companies, among 

others, from the sale, redemption, or repurchase of the investment company’s redeemable 

securities except at a price based on the current net asset value of such security.  

33. As a result of the conduct described above, Respondents caused Upright Trust’s 

violation of Rule 38a-1, which requires a RIC to adopt and implement written policies and 

procedures reasonably designed to prevent violations of the federal securities laws. 

Disgorgement and Civil Penalties 

34. The disgorgement and prejudgment interest ordered in Section IV, paragraph C. is 

consistent with equitable principles and does not exceed Upright’s net profits from its violations, 

and will be distributed to harmed investors to the extent feasible.  The Commission will hold funds 

paid pursuant to Section IV, paragraph C. in an account at the United States Treasury pending 

distribution.  Upon approval of the distribution final accounting by the Commission, any amounts 

remaining that are infeasible to return to investors, and any amounts returned to the Commission in 

the future that are infeasible to return to investors, may be transferred to the general fund of the 

U.S. Treasury, subject to Section 21F(g)(3) of the Exchange Act.   

Undertakings 

35. Independent Compliance Consultant.  

 

a. Upright has undertaken to retain, within 30 days of the date of the issuance 

of this Order, the services of an Independent Compliance Consultant 



 

 

10 

(“Consultant”) not unacceptable to the staff of the Commission.  The Consultant’s 

compensation and expenses shall be borne exclusively by Upright.  Upright shall 

require the Consultant to conduct a comprehensive review of, and recommend 

corrective measures concerning, Upright’s compliance and other policies and 

procedures with respect to:  

 

i. Monitoring its mutual fund clients’ compliance with the 

requirements of the mutual fund clients’ classifications, 

sub-classifications and investment policies; 

ii. Proxy solicitation; 

iii. NAV calculation and publication;  

iv. Reconciliation of data with fund broker-dealers, custodians 

and transfer agents;  

v. Monitoring of the performance of administrative and 

professional services rendered to its mutual fund clients by 

other service providers;  

vi. Coordination of fund audits;  

vii. Communications with clients, auditors, and others about 

possible failures to comport with fund governing 

documents or possible failures to comply with the law by 

clients or investment advisers; and  

viii. Detecting and addressing fraud.  

 

b. Upright shall provide to the Commission staff, within thirty (30) days of 

retaining the Consultant, a copy of an engagement letter detailing the Consultant’s 

responsibilities, which shall include the review described in paragraph 35.a. 

  

c. At the end of the review, which in no event shall be more than ninety (90) 

days after the date the Consultant is retained by Upright, Upright shall require the 

Consultant to submit an Initial Report to Upright and to the Commission staff.  

The Initial Report shall address the items in paragraph 35.a, and shall describe the 

review performed, the conclusions reached, the Consultant’s recommendations for 

changes in, or improvements to, Upright’s policies and procedures, and a 

procedure for implementing the recommended changes in, or improvements to, 

those policies and procedures.  

 

d. Upright shall adopt all recommendations contained in the Initial Report 

within ninety (90) days of receipt; provided, however, that within thirty (30) days 

of Upright’s receipt of the Initial Report, Upright may, in writing, advise the 

Consultant and the Commission staff of any recommendations that it considers 

unnecessary, unduly burdensome, impractical, or inappropriate.  With respect to 

any such recommendation, Upright need not adopt that recommendation at that 

time, but shall propose in writing an alternative policy, procedure, or system 

designed to achieve the same objective or purpose.  The Consultant shall evaluate 



 

 

11 

any alternative procedure proposed by Upright.  As to any recommendation on 

which Upright and the Consultant do not agree, such parties shall attempt in good 

faith to reach an agreement within thirty (30) days after Upright provides the 

alternative procedures described above. In the event that Upright and the 

Consultant are unable to agree on an alternative proposal, Upright and the 

Consultant shall jointly confer with the Commission staff to resolve the matter.  In 

the event that, after conferring with the Commission staff, Upright and the 

Consultant are unable to agree on an alternative proposal, Upright will abide by 

the recommendations of the Consultant.  

 

e. Within two hundred seventy (270) days after the date of the issuance of 

this Order, Upright shall require the Consultant to complete its review and submit 

a written final report to Commission staff.  The Final Report shall describe the 

review made of Upright’s compliance policies and procedures; set forth the 

conclusions reached and recommendations made by the Consultant, as well as any 

proposals made by Upright; and describe how Upright is implementing the 

Consultant’s final recommendations.  

 

f. Upright shall take all necessary and appropriate steps to adopt and 

implement all recommendations contained in the Consultant’s Final Report.  The 

date of completion of the undertakings shall, in no event, be later than the one 

year anniversary from the date of issuance of this Order.  

 

g. For good cause shown and upon timely application by the Consultant or 

Upright, the Commission’s staff may extend any of the deadlines set forth in these 

undertakings.  

 

h. To ensure the independence of the Consultant, Upright (i) shall not have 

the authority to terminate the Consultant or substitute another consultant for the 

initial Consultant, without the prior written approval of the Commission’s staff; 

(ii) shall compensate the Consultant and persons engaged to assist the Consultant 

for services rendered pursuant to the Order at their reasonable and customary 

rates; and (iii) shall not invoke the attorney-client or any other doctrine or 

privilege to prevent the Consultant from communicating with or transmitting any 

information, reports, or documents to the Commission’s staff.  

 

i. Upright shall require the Consultant to enter into an agreement providing 

that for the period of the engagement and for a period of two years from 

completion of the engagement, the Consultant shall not enter into any 

employment, consultant, attorney-client, auditing, or other professional 

relationship with Upright, or any of its present or former affiliates, directors, 

officers, employees, or agents acting in their capacity as such.  The agreement 

will also provide that the Consultant will require that any firm with which he/she 

is affiliated or of which he/she is a member, and any person engaged to assist the 



 

 

12 

Consultant in the performance of his or her duties under this Order shall not, 

without prior written consent of the Commission staff, enter into any 

employment, consultant, attorney-client, auditing, or other professional 

relationship with Upright, or any of its present or former affiliates, directors, 

officers, employees, or agents acting in their capacity as such for the period of the 

engagement and for a period of two years after the engagement.  

 

The reports by the independent consultant will likely include confidential 

financial, proprietary, competitive business or commercial information.  Public 

disclosure of the reports could discourage cooperation, impede pending or 

potential government investigations or undermine the objectives of the reporting 

requirement.  For these reasons, among others, the reports and the contents 

thereof are intended to remain and shall remain non-public, except (1) pursuant to 

court order, (2) as agreed to by the parties in writing, (3) to the extent that the 

Commission determines in its sole discretion that disclosure would be in 

furtherance of the Commission’s discharge of its duties and responsibilities, or (4) 

is otherwise required by law. 

 

 

36. Within 30 days of the entry of this Order, Upright shall notify affected investors 

(i.e., those former and current Upright clients from July 1, 2017 through June 30, 2020, and those 

former and current shareholders of any series of Upright Trust who owned shares of any series of 

Upright Trust and any time from July 1, 2017 through June 30, 2020 (hereinafter, “affected 

investors”)) of the settlement terms of this Order by sending a copy of this Order to each affected 

investor via mail, email, or such other method not unacceptable to the Commission staff, 

together with a cover letter in a form not unacceptable to the Commission staff. 

 

37. Upright shall certify, in writing, compliance with the undertakings set forth above. 

The certification shall identify the undertakings, provide written evidence of compliance in the 

form of a narrative, and be supported by exhibits sufficient to demonstrate compliance.  The 

Commission’s staff may make reasonable requests for further evidence of compliance, and 

Upright agrees to provide such evidence.  The certification and supporting material shall be 

submitted to Andrew B. Dean, Assistant Regional Director, Division of Enforcement, Securities 

and Exchange Commission, 200 Vesey Street (Brookfield Place), 4th Floor, New York, NY 

10281, with a copy to the Office of the Chief Counsel of the Enforcement Division, no later than 

sixty (60) days from the date of completion of the undertakings. 

 

IV. 

 In view of the foregoing, the Commission deems it appropriate, and in the public interest to 

impose the sanctions agreed to in Respondents’ Offers. 

 Accordingly, pursuant to Section 8A of the Securities Act, Sections 203(e), 203(f) and 

203(k) of the Advisers Act, and Sections 9(b) and 9(f) of the Investment Company Act, it is hereby 

ORDERED that: 



 

 

13 

 A. Respondents cease and desist from committing or causing any violations and any 

future violations of Sections 17(a)(2) and 17(3) of the Securities Act, Sections 13(a)(1), 13(a)(3), 

20(a) and 34(b) of the Investment Company Act and Rules 20a-1(a), 22c-1 and 38a-1 promulgated 

thereunder, and Sections 206(2) and 206(4) of the Advisers Act and Rules 206(4)-7 and 206(4)-8 

promulgated thereunder. 

B. Respondents are censured. 

C. Respondent Upright shall pay disgorgement of $390,704.92 and $36,505.10 in 

prejudgment interest thereon to the Securities and Exchange Commission. 

 

D. Respondents shall pay, jointly and severally, a civil penalty of $90,000 to the 

Securities and Exchange Commission.   

 

Payment of the above amounts shall be made in the following installments: (1) $181,023.02 shall 

be paid within 10 days of the entry of this Order; (2) $103,442 shall be paid within 120 days of the 

entry of this Order; (3) $103,442 shall be paid within 240 days of the entry of this Order; and (4) 

$129,303 shall be paid within 360 days of the entry of this Order.  Payments shall be applied first 

to post-order interest, which accrues pursuant to SEC Rule of Practice 600 and pursuant to 31 

U.S.C. § 3717.  Prior to making the final payment set forth herein, Respondents shall contact the 

staff of the Commission for the amount due.  If Respondents fail to make any payment by the date 

agreed and/or in the amount agreed according to the schedule set forth above, all outstanding 

payments under this Order, including post-order interest, minus any payments made, shall become 

due and payable immediately at the discretion of the staff of the Commission without further 

application to the Commission. 

 

(1) Payment must be made in one of the following ways:   

 

(a) Respondents may transmit payment electronically to the 

Commission, which will provide detailed ACH transfer/Fedwire 

instructions upon request;  

 

(b) Respondents may make direct payment from a bank account via 

Pay.gov through the SEC website at 

http://www.sec.gov/about/offices/ofm.htm; or  

 

(c) Respondents may pay by certified check, bank cashier’s check, or 

United States postal money order, made payable to the Securities 

and Exchange Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

http://www.sec.gov/about/offices/ofm.htm


 

 

14 

Payments by check or money order must be accompanied by a cover 

letter identifying Upright Financial Corp. and David Yow Shang 

Chiueh as Respondents in these proceedings, and the file number of 

these proceedings; a copy of the cover letter and check or money 

order must be sent to Andrew B. Dean, Assistant Regional Director, 

Division of Enforcement, Securities and Exchange Commission, 

200 Vesey Street (Brookfield Place), 4th Floor, New York, NY 

10281.   

 

(2) Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, 

a Fair Fund is created for the penalties, disgorgement, and prejudgment 

interest referenced in this Section IV, paragraphs C and D.  Amounts 

ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax 

purposes.  To preserve the deterrent effect of the civil penalty, Respondents 

agrees that in any Related Investor Action, they shall not argue that they are 

entitled to, nor shall they benefit by, offset or reduction of any award of 

compensatory damages by the amount of any part of Respondents’ payment 

of a civil penalty in this action (“Penalty Offset”).  If the court in any 

Related Investor Action grants such a Penalty Offset, Respondents agree 

that they shall, within 30 days after entry of a final order granting the 

Penalty Offset, notify the Commission’s counsel in this action and pay the 

amount of the Penalty Offset to the Securities and Exchange Commission.  

Such a payment shall not be deemed an additional civil penalty and shall not 

be deemed to change the amount of the civil penalty imposed in this 

proceeding.  For purposes of this paragraph, a “Related Investor Action” 

means a private damages action brought against Respondents by or on 

behalf of one or more investors based on substantially the same facts as 

alleged in the Order instituted by the Commission in this proceeding. 

 

E. Respondent Upright shall comply with the undertakings enumerated in Section III, 

paragraph 35 through 37 above.   

  

V. 

 It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 

Respondent Chiueh, and further, any debt for disgorgement, prejudgment interest, civil penalty or 

other amounts due by Respondent Chiueh under this Order or any other judgment, order, consent 

order, decree or settlement agreement entered in connection with this proceeding, is a debt for the 



 

 

15 

violation by Respondent Chiueh of the federal securities laws or any regulation or order issued 

under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 

 By the Commission. 

 

 

 

       Vanessa A. Countryman 

       Secretary