On September 25, 2023, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against (collectively, the “Respondents”) for a breach of their duty of care.  In the Order, the Commission found that between October 2018 and July 2019, Fieldman Rolapp & Associates, Inc. (“Fieldman Rolapp”) and Anna Sarabian (“Sarabian”), Fieldman Rolapp’s lead engagement partner, made a series of presentations to a city in California (the “City”) with analyses of the costs of potential options to fund a community project.  The presentations contained comparisons of several alternatives for funding the project, including funding it entirely with available cash, entirely with new debt with various maturity dates, and several hybrid options consisting of both cash and new debt with various maturity dates.  According to the Order, Fieldman Rolapp’s model for calculating the net present value costs of the different financing options contained flawed assumptions that made it appear the 100% debt option with the longest maturity was the least expensive option for financing when, in fact, other options would have been less expensive on a net present value basis. The City ultimately decided to finance the project entirely with new debt. 

As a result of their conduct, the Commission found that the Respondents violated Section 15B(c)(1) of the Exchange Act, and Rules G-17 and G-42(a)(ii) of the Municipal Securities Rulemaking Board (“MSRB”).  The Commission ordered the Respondents to pay $56,548.50 in disgorgement, $11,368.77 in prejudgment interest, and a total of $90,000.00 in civil money penalties, for a collective total of $157,917.27, to the Commission.  The Commission also ordered that, of this amount, $22,500.00 shall be transferred to the Municipal Securities Rulemaking Board (“MSRB”) in accordance with Section 15B(c)(9)(A) of the Exchange Act, and the Commission created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties collected, along with the disgorgement and interest collected, can be distributed to harmed investors (the “Fair Fund”).  See the Commission’s Order:  Release No. 98510.  https://www.sec.gov/files/litigation/admin/2023/34-98510.pdf {KEEP ALL LINK INSTRUCTIONS HIGHLIGHTED} 

The Fair Fund consists of the $157,917.27 collected from the Respondents, less $22,500.00, which was transferred to the MSRB in accordance with the Order. The Fair Fund has been deposited in a Commission-designated account at the U.S. Department of the Treasury, and any accrued interest will be added to the Fair Fund. 

On April 3, 2024, the Commission issued an order appointing Heffler, Radetich & Saitta, LLP, as the Tax Administrator of the Fair Fund.  See the Commission’s Order:  Release No. 34-99897

For more information, please contact the Commission:  

Office of Distributions 

Email: ENFOfficeofDistributions@sec.gov