Municipal Securities Cases and Materials: 2015 - 2018

Office of Municipal Securities

September 2020

This compilation of Municipal Securities Cases and Materials was prepared by the Office of Municipal Securities of the Securities and Exchange Commission. This compilation covers calendar years 2015 through 2018 but does not include any cases related to the Municipal Continuing Disclosure Cooperative (“MCDC”) Initiative.[1] The links below contain the full text of certain Commission orders/opinions, administrative law judge decisions, and litigation releases, as well as federal court decisions, involving participants in municipal securities transactions. In some instances, the linked document is a determination of fact and law following a hearing; in others, findings made by the Commission in a settled proceeding in which the named party has neither admitted nor denied the findings, but consented to entry of the order. In still other instances, such as a complaint, the document may consist of allegations.

The compilation organizes enforcement actions by relevant participants to municipal securities transactions or topics. However, inclusion under a particular heading does not limit in any manner the relevance of the document to other participants or topics.

While this compilation provides an extensive review of Commission activity in the municipal securities market for the relevant period, it does not purport to be exhaustive. It also does not include actions by private parties under the federal securities laws arising from municipal securities transactions, or Commission and private actions under the antifraud and other sections of the federal securities law arising from transactions not involving municipal securities. Such materials may also be useful to the reader.

Please visit the official Office of Municipal Securities webpage, maintained by the Commission, at www.sec.gov/municipal for more information related to the Commission’s activities regarding municipal securities.

Issuers

Commission Orders – Settled Administrative Proceedings

• In the Matter of Westlands Water District, Thomas W. Birmingham, and Louie David Ciapponi, Securities Act of 1933 Release No. 10053, Accounting and Auditing Enforcement Release No. 3752, Administrative Proceeding File No. 3-17162 (March 9, 2016).
  • See Public Officials section.
• In the Matter of Beaumont Financing Authority, Securities Act of 1933 Release No. 10406, Administrative Proceeding File No. 3-18132 (Aug. 23, 2017).
• In the Matter of The Port Authority of New York and New Jersey, Securities Act of 1933 Release No. 10278, Administrative Proceeding File No. 3-17763 (Jan. 10, 2017).

Federal Court Actions/Injunctive Proceedings

• Securities and Exchange Commission v. Rhode Island Commerce Corporation et al., No. 1:16-cv-00107 (D.R.I., filed Mar. 7, 2016).
• Securities and Exchange Commission v. Town of Ramapo et al., No. 16-cv-2779 (S.D.N.Y., filed Apr. 14, 2016).
• Securities and Exchange Commission v. City of Miami, Florida, et al., No. 1:13-cv-22600-CMA (S.D.F., filed July 19, 2013) (Sept. 14, 2016).
• Securities and Exchange Commission v. Town of Oyster Bay, New York, and John Venditto, et al., No. 1:17-cv-06809 (E.D.N.Y. filed Nov. 21, 2017).

Public Officials

Commission Orders – Settled Administrative Proceedings

• In the Matter of Westlands Water District, Thomas W. Birmingham, and Louie David Ciapponi, Securities Act of 1933 Release No. 10053, Accounting and Auditing Enforcement Release No. 3752, Administrative Proceeding File No. 3-17162 (March 9, 2016).
  • See Issuers section.

Federal Court Actions/Injunctive Proceedings

• Securities and Exchange Commission v. City of Harvey, Illinois and Joseph T. Letke, United States District Court for the Northern District of Illinois, Civil Action No. 1:14-cv-4744 (N.D. Ill., filed June 24, 2014), Litigation Release No. 23180 (Jan. 27, 2015).
• Securities and Exchange Commission v. Alan Charles Kapanicas, No. 5:17-cv-01704 (C.D. Cal., filed Aug. 23, 2017).
• Securities and Exchange Commission v. Town of Oyster Bay, New York, and John Venditto, et al., No. 1:17-cv-06809 (E.D.N.Y. filed Nov. 21, 2017).
• Securities and Exchange Commission v. David Webb, Jr., Civil Action No. 17-8685 (N.D. Ill., filed December 1, 2017).
• Securities and Exchange Commission v. Town of Ramapo, et al., No. 16-cv-2779 (S.D.N.Y. filed Apr. 14, 2016), Litigation Release No. 24161 (June 8, 2018).
• Securities and Exchange Commission v. Town of Ramapo, et al., No. 16-cv-2779 (S.D.N.Y. filed Apr. 14, 2016), Litigation Release No. 24351 (Nov. 15, 2018).

Obligated Persons

Federal Court Actions/Injunctive Proceedings

• Securities and Exchange Commission v. Christopher Freeman Brogdon, Case No. 15-civ-8173 (KM) (D.N.J. filed Nov. 20, 2015).
• Securities and Exchange Commission v. Rangel, No. 16-6391 (N.D. Ill., filed Mar. 28, 2016).
• Securities and Exchange Commission v. Dwayne Edwards, et al., Civil Action No. 17-cv-393(ES) (D.N.J. filed Jan. 20, 2017), Litigation Release No. 23725 (Jan. 24, 2017).

Accountants

Commission Orders – Settled Administrative Proceedings

• In the Matter of Domenick F. Consolo, CPA and PKF O’Connor Davies, LLP, Securities Act of 1933 Release No. 10242, Securities Exchange Act of 1934 Release No. 79196, Accounting and Auditing Enforcement Release No. 3821, Administrative Proceeding File No. 3-17654 (October 31, 2016).

Underwriters

Commission Orders – Settled Administrative Proceedings

• In the Matter of Edward D. Jones & Co., L.P., Securities Act of 1933 Release No. 9889,Securities Exchange Act of 1934, Release No. 75688, Administrative Proceedings File, No. 3-16751 (August 13, 2015).
• In the Matter of Stina R. Wishman, Securities Act of 1933 Release No. 9890, Securities Exchange Act of 1934, Release No. 75689, Investment Advisers Act of 1940, Release No. 4169, Investment Company Act of 1940, Release No. 31751, Administrative Proceedings File, No. 3-16751(August 13, 2015).
• In the Matter of Lawson Financial Corporation, Securities Act of 1933 Release No. 10334, Securities Exchange Act Of 1934 Release No. 80376, Investment Company Act of 1940 Release No. 32591, Administrative Proceeding File No. 3-17901 (Apr. 5, 2017).
• In the Matter of John T. Lynch, Jr., Securities Act of 1933 Release No. 10335, Securities Exchange Act Of 1934 Release No. 80377, Investment Company Act of 1940 Release No. 32592, Administrative Proceeding File No. 3-17902 (Apr. 5, 2017).
• In the Matter of O’Connor & Company Securities, Inc. and Anthony Michael Wetherbee, Securities Act of 1933 Release No. 10405, Securities Exchange Act Of 1934 Release No. 81462, Investment Company Act of 1940 Release No. 32789, Administrative Proceeding File No. 3-18131(Aug. 23, 2017).
• In the Matter of Charles Kerry Morris, Securities Act of 1933 Release No. 10529, Securities Exchange Act of 1934 Release No. 83838, Administrative Proceeding File No. 3-18639 (Aug. 14, 2018).
  • See Sales Practice section.
• In the Matter of NW Capital Markets Inc. and James A. Fagan, Securities Exchange Act of 1934 Release No. 84224, Administrative Proceeding File No. 3-18640 (Aug. 14, 2018).
  • See Sales Practice section.

Trustees

Commission Orders – Settled Administrative Proceedings

• In the Matter of BOKF, NA, Securities Act of 1933 Release No. 10204, Securities Exchange Act of 1934 Release No. 78794, Administrative Proceeding File No. 3-17533 (Sept. 14, 2016).

Federal Court Actions/Injunctive Proceedings

• Securities and Exchange Commission v. Marrien Neilson, No. 2:16-cv-05475-KM-JBC (D.N.J., filed Sept. 9, 2016).

Financial Advisors

Commission Orders – Settled Administrative Proceedings

• In the Matter of First Southwest Company, LLC, Securities Exchange Act of 1934 Release No. 77300, Administrative Proceeding File No. 3-17154 (Mar. 7, 2016).
• In the Matter of Chris D. Rosenthal, Securities Act of 1933 Release No. 10587, Securities Exchange Act of 1934 Release No. 84841, Investment Advisers Act of 1940 Release No. 5076, Investment Company Act of 1940 Release No. 33328, Administrative Proceeding File No. 3-18936 (Dec. 18, 2018).
  • See Sales Practice section.

Investment Advisers

Commission Orders – Settled Administrative Proceedings

• In the Matter of Ancora Advisors LLC, Investment Advisers Act of 1940 Release No. 5077, Administrative Proceeding File No. 3-18937 (Dec. 18, 2018).

Municipal Advisors

Commission Orders – Settled Administrative Proceedings

• In the Matter of Central States Capital Markets, LLC; Mark R. Detter; David K. Malone; And John D. Step, Securities Exchange Act of 1934 Release No. 77369, Investment Advisers Act of 1940 Release No. 4352, Investment Company Act of 1940 Release No. 32027, Administrative Proceeding File No. 3-17170 (Mar. 15, 2016).
• In the Matter of Keygent LLC et al., Securities Exchange Act of 1934 Release No. 78053, Administrative Proceeding File No. 3-17287 (June 13, 2016).
• In the Matter School Business Consulting, Inc. et al., Securities Exchange Act of 1934 Release No. 78054, Investment Company Act of 1940 Release No. 32147, Administrative Proceeding File No. 3-17288 (June 13, 2016).
• In the Matter of Municipal Finance Services, Inc.; Rick A. Smith; and Jon G. Wolff, Securities Exchange Act of 1934 Release No. 81475, Investment Advisers Act of 1940 Release No. 4758, Administrative Proceeding File No. 3-18139 (Aug. 24, 2017).
• In the Matter of Respondents Barcelona Strategies, LLC and Mario Hinojosa, Securities Exchange Act of 1934 Release No. 83191, Investment Company Act of 1940 Release No. 33093, Administrative Proceeding File No. 3-18476 (May 9, 2018).
• In the Matter of Eric Hall & Associates, LLC and Eric Hall, Securities Exchange Act of 1934 Release No. 84224, Investment Company Act of 1940 Release No. 33241, Administrative Proceeding File No. 3-18803 (Sept. 20, 2018).

Federal Court Actions/Injunctive Proceedings

• Securities and Exchange Commission v. Malachi Financial Products, Inc., et al., Civil Action No. 3:18-cv-00001 (S.D.M.S., filed Jan. 2, 2018).
• Securities and Exchange Commission v. Malachi Financial Products, Inc., et al., Civil Action No. 3:18-cv-1- HSO-LRA (S.D. Miss., filed Jan. 2, 2018), Litigation Release No. 24182 (July 2, 2018).

Sales Practice

Commission Orders – Settled Administrative Proceedings

Flipping and Parking Scheme

• In the Matter of Charles Kerry Morris, Securities Act of 1933 Release No. 10529, Securities Exchange Act of 1934 Release No. 83838, Administrative Proceeding File No. 3-18639 (Aug. 14, 2018).
  • See Underwriters section.
• In the Matter of NW Capital Markets Inc. and James A. Fagan, Securities Exchange Act of 1934 Release No. 84224, Administrative Proceeding File No. 3-18640 (Aug. 14, 2018).
  • See Underwriters section.
• In the Matter of Chris D. Rosenthal, Securities Act of 1933 Release No. 10587, Securities Exchange Act of 1934 Release No. 84841, Investment Advisers Act of 1940 Release No. 5076, Investment Company Act of 1940 Release No. 33328, Administrative Proceeding File No. 3-18936 (Dec. 18, 2018).
  • See Financial Advisors section.

Federal Court Actions/Injunctive Proceedings

Flipping Scheme

• Securities and Exchange Commission v. Core Performance Management, LLC, et al., No. 18-cv-81081 (F.L.S.D. filed Aug. 14, 2018).
• Securities and Exchange Commission v. RMR Asset Management Company, LLC, et al., No. 18CV1895 AJB JMA (S.D.C.A. filed Aug. 14, 2018).