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Government Actions

State of Hawaii Department of Commerce and Consumer Affairs v. David S.Y. Chang, Wealthbridge Real Estate LLC, Wealthbridge Inc., Chang Holding Company Inc. and Home Care Solutions

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On June 25, 2020, State of Hawaii Department of Commerce and Consumer Affairs and David S.Y. Chang, Wealthbridge Real Estate LLC, Wealthbridge Inc., Chang Holding Company Inc. and Home Care Solutions (hereinafter, “Respondents”) entered into a Consent Order, Stipulations and Consent to Entry of Consent Order.  The Commissioner has reasonable cause to believe that Respondents violated HRS Chapter 485 and 485A.  Respondents entered into this Consent Order without admitting or denying any of the factual or legal conclusions of the Order.  

The Order alleged Chang, Wealthbridge Inc and Wealthbridge Real Estate LLC violated HRS §485-14 and 485A-402 when they offered and sold the securities of Haumea Funding from July 2008 through October 2011, and the securities of Just Black Holdings (hereinafter, “JBH”) in March 2012, when they were not registered agents of Haumea Funding or JBH.  Chang, Wealthbridge Inc and/or Wealthbridge Real Estate did not disclose to Haumea Investors and the JBH Investors, who were investment advisory clients that the Securities were not registered as securities with the State of Hawaii.  In addition,  Chang, Wealthbridge Inc and/or Wealthbridge Real Estate did not disclose that they themselves were not registered as agents of Haumea Funding or JBH in the State of Hawaii. Third, they did not disclose to some of the Haumea Investors or the JBH Investors that they would receive commission for selling the Haumea Investments and the JBH Investments.  Chang and Wealthbridge did not disclose to the JBH Investors, who were investment advisory clients, that the JBH Investment monies would be used to pay Chang’s personal debts and obligations, and those of his other affiliated companies, all unrelated to JBH. Chang and Wealthbridge represented to JBH Investors who were investment advisory clients, the financial viability and soundness of the investments in JBH, but failed to disclose to them they did not know what the company was going to do to generate income and returns for the investors. 

Chang’s, Wealthbridge Inc, Chang Holding Company Inc. and Home Care Solutions’ actions in connection with the liquidation by their client of their securities to purchase their participation in the Care for Life Program, constitutes a violation of HRS §485A-501(a)(2), including the following:
• Chang’s, Wealthbridge Inc, Chang Holding Company Inc. and Home Care Solutions’ represented to their Clients, that their securities would be liquidated to purchase long term care insurance policies for their benefit, but were not purchased; 
• In addition they did not disclose to their Clients their payments for the Care for Life program would be used to pay the personal debts and obligations of Chang and his affiliated companies. 

The Respondents actions noted, in connected with their investment advisory activities, constitute prohibited conduct by an investment adviser and investment advisor representative in violation of HRS §485A-502(a)(1) as follows:
• Their investment advisory activities related to the sale of the securities employment a device scheme, or artifice to defraud another person.
• Their investment advisory activities related to the loans to clients employed a device scheme, or artifice to defraud another person; and 
• Their investment advisory activities related to the sale of securities to participate in the Care for Life Program for some of their Clients employed a device scheme or artifice to defraud another person. 

The violations alleged in the Order in connection with their advisory activities have demonstrated an unworthiness to transact the business of an investment advisor and investment advisor representative. In addition they violated the Elderly Client Enhancement rule of HRS Chapter 485A-604.5 as their violations were directed toward, targeted or were committed against persons who at the time of the violation were sixty-two of age or older. 

The Order is the final order of the commissioner and orders the following:

• Respondents shall refrain from making any offer to sell, solicitation to purchase, and/or sale of any security within, to or from Hawaii
• Wealthbridge, Inc. registration as an investment advisor in Hawaii is revoked as of September 30, 2020
• Chang’s registration as an investment advisor representative in Hawaii is revoked as of September 30, 2020
• Respondents shall pay Restitution to investors, their heirs, executors, administrators, successors, and assigns in the amount of $576,000.00.
• Respondents shall pay an Administrative Penalty of $250,000 to the State of Hawaii, Department of Commerce and Consumer Affairs, Business Registration Division.  $225,000 shall be suspended on the condition that Respondents conform their conduct to the requirements of the securities laws of Hawaii and comply with the terms and conditions of the Consent Order. 

For more information please contact the State of Hawaii Department of Commerce and Consumer Affairs at (808) 586-2850 or dcca@dcca.hawaii.gov.

Licensing

On 09/30/2020 the Financial Industry Regulatory Authority revoked the license of Wealthbridge Inc.. BBB encourages you to contact the following agency or agencies to confirm this information: - http://brokercheck.finra.org/Support/TermsAndConditions.aspx - 3015906500

Alert

On September 30, 2020, the State of Hawaii Department of Commerce and Consumer Affairs Business Registration Division – Securities  revoked the registration of Wealthbridge, Inc. as an investment advisor as well as David Chang as an investment advisor.  For more information, please contact the State of Hawaii Department of Commerce and Consumer Affairs Business Registration Division – Securities at https://cca.hawaii.gov/sec  or (808) 586-2740.