A former managing director for UBS’ wealth management business in Silicon Valley is no longer with the firm after allegations of having staff employees take her continuing education courses.
Flora Dong, who was at UBS for 16 years, resigned in May after the firm accused her of giving out her login credentials for exams administered by both the Financial Industry Regulatory Authority and the National Futures Association, and asking staff to take required examinations for her. Dong was also accused of circumventing internal controls at UBS to have employees complete mandatory training for her and of violating the firm’s prohibitions on the use of messaging services like WhatsApp and other “off-channel communications,” according to BrokerCheck.
A UBS spokesperson declined to comment on the allegations.
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Brokers and financial advisors are required by FINRA and other industry groups to complete continuing education requirements to keep their licenses and certifications up to date. The goal is to ensure they stay abreast of current laws and practices so that clients can expect a certain level of service and competence.
Accusations of cheating on continuing education requirements are not uncommon in the brokerage industry. FINRA, broker-dealers’ self-regulator, confirmed last year that a sweeping investigation had turned up nearly 70 cases of brokers in New York state paying someone else to obtain CE credits for them.
When FINRA confirmed its investigation had taken place, 63 of the accused brokers had accepted suspensions from the industry and four had been banned. FINRA officials and documents confirmed that the scheme involved one person completing the CE requirements for the 63, but they did not explicitly say whether that person was paid.
“FINRA has brought numerous prior AWCs [letters of acceptance, waiver and consent] against individuals who committed misconduct on CE examinations, including cheating on or receiving improper assistance during insurance-related CE examinations,” Annette Carpender, senior vice president of FINRA’s National Cause Program, said in a statement at the time. “Review of historic AWCs available at FINRA’s Disciplinary Actions Online database includes prior instances in which FINRA has issued numerous insurance CE-related AWCs close in time.”
The allegations against Dong were unrelated to that investigation. Besides having staff complete FINRA CE requirements for her, she was also accused of having employees stand in for her to take the National Futures Association’s Swaps Proficiency exam, which tests brokers’ knowledge of a type of financial derivative known as a swap. The National Futures Association is the self-regulator of the derivatives industry.
Dong has since gone on to found Arden Global Family Offices, a registered investment advisor in Palo Alto, California. A Form ADV the firm filed with the Securities and Exchange Commission on July 9 names her as the managing member and chief compliance officer, and Patrick Joseph Burns as general counsel for the firm. The regulatory filing lists no assets under management.
Dong’s LinkedIn page still lists her as a managing director for UBS’ wealth business in San Francisco. She did not respond to phone or LinkedIn messages, and Burns did not return a phone call.
Alongside violations with continuing education requirements, Dong was accused of breaching UBS’ policies on off-channel communications, or messages sent outside firms’ normal tracking systems, often using WhatsApp or other encrypted services. Over the past several years, firms large and small have been hit with more than $3 billion in fines by the SEC and Commodities Future Trading Commission over alleged breaches of off-channel communications rules.
UBS was hit in an early round of the penalties handed down by regulators, agreeing in September 2022 to pay the SEC $125 million as part of $1.1 billion in total fines imposed on firms also including Morgan Stanley, Bank of America and Goldman Sachs. As part of the settlement, the firms agreed to take steps to ensure employees were only communicating with clients and each other in ways that could be tracked and recorded. Regulators have said off-channel communications can complicate investigations into potential wrongdoing by making it impossible to retrieve messages brokers have sent about business matters.
According to BrokerCheck, Dong started her career at Morgan Stanley in 1999. She moved to Merrill in 2003 and UBS in 2008.
Besides the disclosure listing the accusations of CE cheating and related matters, Dong has one other customer complaint on her BrokerCheck page. A client accused her of making unauthorized trades and failing to follow instructions. The claims were denied.
