Eugene Hyunwook Kim

(CRD #2264940, Moorestown, New Jersey)

December 2, 2024 – Eugene Hyunwook Kim appealed an OHO decision to the NAC. Kim was fined $35,000, suspended from association with any FINRA member in all capacities for six months, and ordered to pay disgorgement of commissions received in the amount of $16,220, plus pre-judgment interest. The sanctions were based on the findings that Kim engaged in unethical conduct and acted in bad faith by misusing customer funds and making misrepresentations and omissions in connection with a private placement offering sold by his member firm. Kim managed the offering and administered and operated the fund on behalf of his member firm and its affiliated investment advisor. The findings stated that offering documents provided that the fund would purchase shares in a private company at a maximum price per share of $9.75. Customers invested $4 million in the offering, and escrow was closed in December 2017 and January 2018, but the fund did not purchase any shares at that time. As a result of the escrow closings, Kim’s firm received placements fees of $405,500, and the firm then paid Kim $16,220. Ten months later, Kim misused investor funds by twice initiating the purchase of shares at an average price more than double the maximum per share price specified in the offering documents. Kim did so without taking steps to amend the offering documents to provide for a higher per share maximum price, and he arranged for the purchases without disclosing to customers his intention to do so or obtaining their consent. The findings also stated that Kim concealed the true status of the offering through omissions and misrepresentations to firm principals and registered representatives. Kim falsely wrote to two representatives that the offering purchased shares at $9.75 per share when it, at that time, had not purchased any shares. Kim also later told one of the representatives and the firm-affiliate’s CEO that the fund paid $9.75 per share at a time when it had bought shares at above that price. These misrepresentations by Kim were material because the price per share paid for an investment is something that a reasonable investor would consider important and would alter the “total mix” of information available to them about their investment. Kim also made omissions to the firm’s principals when he emailed two contracts for the CEO or CFO to sign for the purchase of the shares. However, Kim failed to disclose that the purchases he had arranged for the offering represented a material change to the terms that had been presented to the offering investors and were for prices far exceeding $9.75 per share. Kim also omitted the offering’s shareholdings from a spreadsheet that the CFO had requested for the purpose of informing the board of directors of the firm and its affiliate’s parent company. Kim repeated these material omissions twice to the CFO, emailing him spreadsheets that included all private share purchases for all offerings except the requested offering. The Hearing Panel found that FINRA did not prove that Kim violated FINRA Rule 2010 in connection with initiating escrow closures for the offering. The Hearing Officer dissented from the majority’s imposition of a six month suspension and, instead, would have imposed a one-year suspension. The sanctions are not in effect pending review. (FINRA Case #2019064508802) If you have suffered losses as a result of Eugene Hyunwook Kim's act and/or actions, we would like to hear from you. We are currently investigating claims on behalf of clients who have suffered significant losses in their portfolios that are managed by Eugene Hyunwook Kim. The Schwartz Law Firm represents investors in claims against financial advisors and their firms. If you have questions about your potential claim or need assistance from an investment fraud lawyer, please contact us at 866-618-0545 or email Matthew Schwartz directly at mschwartz@tslfirm.com.