FINRA barred former Ameriprise Financial (Irvine, CA) broker Jim Jinkook Seol of Lake Forest for participating in $100 million-worth of private securities transactions and outside business activities by selling away, and deliberately concealing the misconduct, from Ameriprise. Investigators also found that Seol's selling away product contained several red flags—such as an "above and beyond [costs]" management fee—within memoranda that would have made it otherwise unsuitable for investors, and that Seol failed to disclose at least some of these features and risks.
According to the Hearing Panel's decision, issued following a hearing at FINRA's Los Angeles, California office, Seol formed the California corporation "West Regional Center, Inc." (WRCI) in the furtherance of the United States Citizenship and Immigration Services' EB-5 program, which allows foreign investors to receive permanent visas in exchange for capital investments and/or the creation of US jobs.
Investigators found that Seol, through WRCI, solicited investments in California Energy Investment Fund I, LP (CEIFI) and, through another corporation, YL Partners, Inc., agreed to fund and create Yogurtland franchises and jobs for immigrants.
The OHO report states that Seol sold a total of $100 million through WRCI and in CEIFI, and away from Ameriprise.
FINRA said that Seol made a series of agreements with foreign migration companies and law firms to identify potential investors, and then directly solicited those investors through presentations about investment opportunities in NextEra Energy Capital Holdings, Inc., and Genesis Solar Energy Project.
The findings state that in his solicitations or advertisements, Seol represented that each investment would create "no fewer than ten (10) direct and/or indirect jobs per EB-5 investor in order to permit investors to qualify for immigration to the United States." According to FINRA, Seol solicited at least 200 investors.
Investigators wrote that Seol failed to disclose to investors certain risks outlined in CEIFI's offering memorandum, such as its suitability "only for investors who do not need liquidity...and who can afford the loss of their entire investment." Seol's disclosure failures also included this line from the Genesis documents: "[Genesis may] earn returns below market for similar investments."
The report also stated that the memorandum's fees and costs section included a "management fee" paid to WRCI of $4,000 per investor, which FINRA described as "above and beyond WRCI's costs," surmising that, "in all likelihood the annual interest received from the investment would be consumed by WRCI's 'management fee.'"
FINRA also found that Seol "intentionally and deceptively concealed WRCI" from Ameriprise through false representations during annual site visits from his Ameriprise supervisor, and through deliberately false representation on annual compliance questionnaires in which Seol inaccurately claimed he was not involved with an outside business activity.
The report stated that Ameriprise's compliance inspector confirmed that Seol "was familiar with the firm's policies." Ameriprise would later terminate Seol in 2014 for the aforementioned misconduct, which FINRA subsequently described as "egregious."
If you have invested with former Ameriprise Financial broker Jim Jinook Seol of Southern California, or with any broker or financial adviser whose solicitation and sale of a security away from their FINRA-member firm, or whose disclosure failures and unsuitable recommendations have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.