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THOMAS JUNGHO YU, A FORMER REGISTERED REPRESENTATIVE WITH MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, ENGAGED IN CONDUCT INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE IN THAT HE MISAPPROPRIATED CUSTOMER SECURITIES -- PERMANENT SAX.

EXCHANGE HEARING PANEL DECISION 89-45

April 27, 1989

An Exchange Hearing Panel met to consider a Stipulation of Facts ana consent to Penalty entered into between the Exchange's Division of Enforcement and Thomas Jungho Yu, a former registered representative with Merrill Lynch, Pierce, Fenner & Smith Incorporated. Without admitting or denying guilt, Yu consents to a finding by the Hearing Panel that he engaged in conduct inconsistent with just and equitable principles of trade in that he misappropriated customer securities. For the sole purpose of settling this disciplinary proceeding, the Division of Enforcement and Yu stipulate to certain facts, the substance of which follows: 1. Thomas Jungho Yu was born on November 27, 1961. Yu was first employed in the securities industry by Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "firm") on February 18, 1986. He was approved as a registered representative on June 16, 1986. Yu was discharged from employment with the firm on September 4, 1987. Yu is not presently employed in the securities industry. By letter dated the Division of investigating a employed at the August l, 1988, which Yu received, Enforcement advised Yu that it was matter which occurred while he was firm.

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As a firm registered representative, Yu serviced the account of firm customer A. In August of 1987, Yu utilized the branch office computer system to change customer A's address of record to 2636 Blackmore Street #314, Houston, Texas. Yu's own address was #150 at the same building address. Un August 24, 1987, Yu caused a certificate representing 656 XYZ Corporation shares to be delivered out of customer A's account to the address entered by Yu without customer A's authorization.

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In September of 1987, the firm computer system was once again entered by Yu and customer A's correct record address was replaced. The detection of the missing 650 shares of XYZ occurred when customer A did not receive a dividend check in October of 1987. Customer A contacted the new registered representative who assumed management of her account after Yu's discharge. The new registered representative was advised by the transfer agent that the address of the registered owner had been changed to that of Yu. Yu had the 650 XYZ shares transferred to his name by forging customer A's signature to assignment and transfer documents without her knowledge or authorization. Yu submitted a signed letter to the firm in which he admitted the misappropriatIon of the 650 XYZ shares, selling a portion thereof and converting the proceeds to 'is own use.

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DECISION The Hearing Panel, in accepting the Stipulation of Facts and consent to Penalty, found Yu guilty as set forth above by unanimous vote.

PENALTY In view of the above findings, the Hearing Panel, by unanimous vote, imposed the penalty consented to by Yu of a permanent bar from membership, allied membership, approved person status and from employment or association in any capacity with any member or member organization.

For the Hearing Panel

John J. Mulcahy, Jr. Chief Hearing Officer