Opinion
: 21-CV-1669-JO-MSB
10-07-2024
SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. CHOICE ADVISORS, LLC, and MATTHIAS O'MEARA, Defendants.
AMENDED INJUNCTION AGAINST DEFENDANT CHOICE ADVISORS, LLC AND MATTHIAS O'MEARA
Hon. Jinsook Ohta United States District Judge
IT IS HEREBY ORDERED that Defendants Choice and O'Meara are permanently restrained and enjoined from violating, directly or indirectly, Section 15B(c)(1) of the Exchange Act, 15 U.S.C. § 78o-4(c)(1), while acting as a municipal advisor or while associated with a municipal advisor, by making use of the mails or any means or instrumentality of interstate commerce:
(1) to provide advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products, the issuance of municipal securities, or to undertake a solicitation of a municipal entity or obligated person, in contravention of any rule of the MSRB; or
(2) to engage in any act, practice, or course of business which is not consistent with a municipal advisor's fiduciary duty or that is in contravention of any rule of the MSRB.
As provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendants' officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendants or with anyone described in (a).
B.
IT IS FURTHER ORDERED that Defendant Choice is permanently restrained and enjoined from violating, directly or indirectly, Section 15B(a)(1)(B) of the Exchange Act, 15 U.S.C. § 78o-4(a)(1)(B), while acting as a municipal advisor, by providing advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal securities, or undertaking a solicitation of a municipal entity or obligated person, unless registered in accordance with Section 15B(a)(1)(B) of the Exchange Act.
As provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant Choice's officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant Choice or with anyone described in (a).
C.
IT IS FURTHER ORDERED that Defendant Choice is permanently restrained and enjoined from violating, directly or indirectly, Rule A-12 of the MSRB by engaging in municipal advisory activities prior to registering with the MSRB.
As provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant Choice's officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant Choice or with anyone described in (a).
D.
IT IS FURTHER ORDERED that Defendants Choice and O'Meara are permanently restrained and enjoined from violating, directly or indirectly, Rule G-17 of the MSRB in the conduct of their municipal securities or municipal advisory activities, by failing to deal fairly with all persons or by engaging in any deceptive, dishonest, or unfair practice.
As provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendants' officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendants or with anyone described in (a).
E.
IT IS FURTHER ORDERED that Defendants Choice and O'Meara are permanently restrained and enjoined from violating, directly or indirectly, Rule G-42 of the MSRB by any of the following means: (i) breaching their duty of care to their obligated person client or clients; (ii) breaching their fiduciary duty, duty of loyalty, or duty of care to their municipal entity client or clients; (iii) failing to provide their municipal advisory client or clients full and fair disclosures in writing of all material conflicts of interest; (iv) making a representation or submission of information that Defendants know or should know is either materially false or materially misleading due to the omission of a material fact about the capacity, resources, or knowledge of Defendants to a client or prospective client, for the purpose of obtaining or retaining an engagement to perform municipal advisory activities; or (v) making or participating in a fee-splitting arrangement with an underwriter on a municipal securities transaction as to which Choice or O'Meara provide advice.
As provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendants' officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendants or with anyone described in (a).
F.
IT IS FURTHER ORDERED that Defendant Choice is liable for disgorgement of $79,889 representing net profits it gained as a result of the findings in the Court's April 15, 2024 Order granting, in part, the SEC's motion for partial summary judgment [Dkt. 89], together with prejudgment interest thereon in the amount of $27,559. The Court further imposes on Defendant Choice a civil penalty in the amount of $79,889 pursuant to Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). Defendant Choice shall satisfy its obligation by paying a total of $187,337 to the Securities and Exchange Commission within 30 days after entry of this Final Judgment.
G.
IT IS FURTHER ORDERED that Defendant O'Meara is liable for disgorgement of $133,149 representing his profits gained as a result of the findings in the Court's April 15, 2024 Order granting, in part, the SEC's motion for partial summary judgment [Dkt. 89], together with prejudgment interest thereon in the amount of $45,932. The Court further imposes on Defendant O'Meara a civil penalty in the amount of $133,149 pursuant to Section 21(d)(3) of the Exchange Act. Defendant O'Meara shall satisfy his obligation by paying a total of $312,230 to the Securities and Exchange Commission within 30 days after entry of this Final Judgment.
H.
Defendants Choice and O'Meara may transmit payment electronically to the SEC, which will provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly from a bank account via Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm. Defendants may also pay by certified check, bank cashier's check, or United States postal money order payable to the Securities and Exchange Commission, which shall be delivered or mailed to:
Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 and shall be accompanied by a letter identifying the case title, civil action number, and name of this Court; Choice or O'Meara as a defendant in this action; and specifying that payment is made pursuant to this Final Judgment.
Defendants shall simultaneously transmit photocopies of evidence of payment and case identifying information to the SEC's counsel in this action. By making their respective payments, Defendants relinquish all legal and equitable right, title, and interest in such funds and no part of the funds shall be returned to Defendants.
The SEC may enforce the Court's judgment for disgorgement and prejudgment interest by using all collection procedures authorized by law, including, but not limited to, moving for civil contempt at any time after 30 days following entry of this Final Judgment.
The SEC may enforce the Court's judgment for penalties by the use of all collection procedures authorized by law, including the Federal Debt Collection Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil contempt for the violation of any Court orders issued in this action.
Defendants shall pay post judgment interest on any amounts due after 30 days of the entry of this Final Judgment pursuant to 28 U.S.C. § 1961. The SEC shall hold the funds, together with any interest and income earned thereon (collectively, the “Fund”), pending further order of the Court.
The SEC may propose a plan to distribute the Fund subject to the Court's approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. The Court shall retain jurisdiction over the administration of any distribution of the Fund and the Fund may only be disbursed pursuant to an Order of the Court.
I.
IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.
IT IS SO ORDERED.