U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25935 /January 31, 2024
Securities and Exchange Commission v. Comer Capital Group, LLC and Brandon L. Comer, No. 19-civ-04324 (N.D. Ill.) filed June 27, 2019
SEC Obtains Final Judgment Against Municipal Advisor Charged with Breaching Fiduciary Duty
On January 30, 2024, the Securities and Exchange Commission obtained a final judgment against defendants Comer Capital Group, LLC and Brandon L. Comer, whom the SEC previously charged with breaching their fiduciary duty in connection with a $6 million municipal bond offering by the Harvey Public Library District in Harvey, Illinois.
The SEC’s complaint was filed on June 27, 2019 in federal district court in Chicago, Illinois. The complaint alleged that Mississippi-based municipal advisor Comer Capital Group, LLC and its managing partner, Brandon L. Comer, failed to protect the interests of their client, the Library District. According to the complaint, the Library District hired Comer Capital and Comer to assist with the bond offering process, including to provide advice on: (1) the selection of an experienced underwriter, and (2) the pricing of the bonds. The SEC alleged that Comer Capital and Comer did not provide advice to the Library District on the qualifications of the underwriter and, upon learning that the underwriter was having difficulty finding investors to buy the bonds, did not consider or recommend that the District consider engaging a different or an additional broker-dealer to underwrite the bonds. The SEC also alleged that Comer Capital and Comer did not provide the Library District with the information and advice needed to determine whether the price of the bonds was fair and reasonable. According to the SEC’s complaint, the price was not fair and reasonable and the mispricing of the bonds will cause the Library District to pay more than $500,000 in additional interest over the life of the bonds. The complaint charged the defendants with breaching their fiduciary duties in violation of Section 15B(c)(1) of the Securities Exchange Act of 1934.
Without admitting or denying the allegations in the SEC’s complaint, Comer Capital and Comer consented to entry of a final judgment ordering Comer Capital to pay disgorgement in the amount of $25,000 plus prejudgment interest thereon. The final judgment also ordered Comer Capital and Comer to pay civil penalties in the amounts of $30,000 and $20,000, respectively.
The SEC’s investigation was conducted by Natalie Garner of the Public Finance Abuse Unit and the Chicago Regional Office with assistance from Joseph O. Chimienti and Jonathan Wilcox, and was supervised by Brian D. Fagel. The SEC’s litigation was led by Michael Foster of the Chicago Regional Office.