As reported in an earlier Post, Missouri’s Secretary of State recently announced that a New York stock broker could face thousands of dollars in fines after cold-calling a Missourian to solicit investments. Since that time, the department has issued a cease and desist order relative to the matter. To recap, Mr. Yun allegedly cold called an employee of the Missouri Securities Division at his office. The broker, Sukhwan Michael Yun, was not registered to offer securities in Missouri as required by law. This happened three weeks after two New York stock brokers with a separate firm repeatedly called the same staff member in the Securities Division’s office with similar investment offers.
As part of the update, we are providing you with a copy of the Cease and Desist order issued in the Yun matter, which provides more detail into the events that took place. Mr. Yun, who then worked at New York broker-dealer Meyers Associates, L.P. (“Meyers”). In December 2010, allegedly cold-called a Securities Division staff member’s work telephone in the James C. Kirkpatrick State Information Center. During that call, Mr. Yun allegedly offered securities, attempted to transact a purchase over the phone, and offered to be the staff member’s personal broker.
Mr. Yun was registered in New York, California, Virginia, Minnesota, and Illinois as an agent of Meyers, but was not registered in Missouri at the time of the solicitation. Agents must either be registered in the states where they solicit the sale of securities, or be exempt from registration. Yun is also charged with failing to disclose material facts during his solicitations, including that he was not registered in Missouri, and that the agent was violating his broker-dealer’s policies and procedures by offering securities in States where he was not registered. Meyers is charged with employing unregistered agents.
Meyers and Yun could be fined more than $30,000 for these violations and could be ordered to pay the costs of the Securities Division’s investigation. The Division of Securities’ investigation into Meyers’s possible failure to reasonably supervise it agents in ongoing.
Of note is that this is not the first time that this has happened in Missouri. In late November, the Securities Division issued a Cease and Desist order against two New York-based brokers and their California-based employer, Financial Network Investment Corporation, for similar violations related to cold-calling the same employee in Securities Department.
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