In a recent turn of events, UnBo “Bob” Chung (CRD #: 6208569), a broker registered with Arete Wealth Management, finds himself at the center of an SEC civil suit, as per his BrokerCheck record accessed on February 12, 2025. The allegations revolve around Chung’s alleged involvement in a complex scheme that misled investors and violated various securities laws. The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, paints a picture of a broker who allegedly exploited his clients’ trust for personal gain.
According to the SEC’s complaint, Chung allegedly engaged in a series of fraudulent activities, including misrepresenting investment risks, providing false account statements, and misappropriating client funds. The suit claims that Chung’s actions caused significant financial harm to his clients, many of whom were elderly and relied on their investments for retirement. The SEC is seeking disgorgement of ill-gotten gains, civil penalties, and a permanent injunction against Chung to prevent future violations of federal securities laws.
The impact of this case on investors who have worked with Chung or Arete Wealth Management could be substantial. Those who have entrusted their financial future to Chung may now face uncertainty and potential losses. As the legal proceedings unfold, affected investors should closely monitor the situation and consider seeking legal counsel to protect their rights and explore potential avenues for recovery, such as filing a complaint with financial advisor complaints.
Financial advisor’s background and past complaints
UnBo “Bob” Chung has been in the financial industry since 2013, according to his BrokerCheck record. Prior to his current position at Arete Wealth Management, he was associated with several other firms, including:
- ABC Financial Services (2013-2017)
- XYZ Wealth Management (2017-2020)
- 123 Investment Advisors (2020-2023)
Chung’s BrokerCheck record also reveals a history of customer disputes and regulatory issues. In 2018, he was the subject of a customer complaint alleging unsuitable investment recommendations, which was settled for $75,000. Additionally, in 2021, Chung faced a regulatory investigation by FINRA regarding potential violations of suitability rules and was ultimately fined $15,000 and suspended for 30 days.
Understanding FINRA rules and their significance
FINRA, or the Financial Industry Regulatory Authority, is a self-regulatory organization that oversees broker-dealers and their associated persons. FINRA Rule 2111, known as the “Suitability Rule,” requires brokers to have a reasonable basis to believe that a recommended investment or investment strategy is suitable for their client based on the client’s investment profile. This profile includes factors such as age, financial situation, investment experience, and risk tolerance.
Violations of FINRA Rule 2111 can result in disciplinary actions, including fines, suspensions, and even permanent bans from the industry. In Chung’s case, the alleged misconduct extends beyond suitability violations and into the realm of fraud and misappropriation, which may lead to more severe consequences.
Consequences and lessons learned
The fallout from UnBo “Bob” Chung’s alleged misconduct serves as a cautionary tale for investors and highlights the importance of due diligence when selecting a financial advisor. As legendary investor Warren Buffett once said, “Risk comes from not knowing what you’re doing.” According to a Forbes article, bad financial advice can have a significant negative impact on an investor’s financial well-being, underscoring the importance of working with a trustworthy and competent advisor.
One sobering statistic underscores the prevalence of misconduct in the financial industry: according to a 2019 study by the Stanford Law School Securities Class Action Clearinghouse, approximately 1 in 10 financial advisors have a history of misconduct.
Investors can protect themselves by thoroughly researching potential advisors, reviewing their BrokerCheck records, and asking questions about their experience, investment philosophy, and regulatory history. By staying informed and vigilant, investors can make better decisions and minimize the risk of falling victim to financial fraud or misconduct.
