SEC v. City of Rochester, New York; Rosiland Brooks-Harris; Capital Markets Advisors, LLC; Richard Ganci; and Richard Tortora, No. LR-26205, Western District of New York (Dec. 30, 2024) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26205 / December 30, 2024 Securities and Exchange Commission v. City of Rochester, New York, Rosiland Brooks-Harris, Capital Markets Advisors, LLC, Richard Ganci, and Richard Tortora, No. 22-cv-6273 (W.D.N.Y. filed June 14, 2022) SEC Resolves Litigation Against City of Rochester, NY, its former Finance Director, and Municipal Advisor The SEC announced that it has resolved all pending litigation in the action it filed in the U.S. District Court for the Western District of New York on June 14, 2022 against the City of Rochester, NY and its former finance director Rosiland Brooks-Harris, and against a New York-based municipal advisor, Capital Markets Advisors, LLC (CMA), and two of its principals, Richard Tortora and Richard Ganci (CMA Defendants). In its Complaint, the SEC alleged that, in 2019, the City, Brooks-Harris, CMA and Ganci misled investors with bond offering documents that included outdated financial statements for the Rochester City School District (District) and did not indicate that the District was experiencing financial distress due to overspending on teacher salaries. The SEC alleged that, in connection with the alleged bond offering conduct, the City and Brooks-Harris violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC alleged that, in connection with the alleged bond offering conduct, Ganci and CMA violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, Section 15B(c)(1) of the Exchange Act, and MSRB Rules G-17 and G-42. The SEC’s Complaint separately alleged that the CMA Defendants failed to disclose to nearly 200 municipal clients that CMA had material conflicts of interest arising from its compensation arrangements. The SEC alleged that, by this conduct, the CMA Defendants violated Section 15B(c)(1) of the Exchange Act, MSRB Rules G-17, G-42 and G-44. As previously announced, on April 15, 2024, the Court found that the CMA Defendants violated those provisions in connection with their failure to disclose material conflicts. On October 16, 2024, the Court entered a final judgment by consent against the City and Brooks-Harris. The City, without admitting or denying the allegations in the Complaint, consented to the entry of the final judgment, which enjoined it from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Brooks-Harris, without admitting or denying the allegations, consented to the entry of the final judgment, which enjoined her from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Court also entered a conduct-based injunction against Brooks-Harris, enjoining her from participating in any issuance, purchase, offer, or sale of municipal securities, and participating in the preparation of any offering materials with respect to municipal securities among other things. On December 26, 2024, the court entered a final judgment by consent against the CMA Defendants. The CMA Defendants, without admitting or denying the allegations in the Complaint, consented to the entry of the final judgment which: (a) enjoined them from future violations of Section 15B(c)(1) of the Exchange Act and MSRB Rules G-17, G-42, and G-44, and (b) ordered civil penalties of $175,000 as to CMA, $30,000 as to Ganci, and $30,000 as to Tortora. As part of the settlement, the SEC dismissed its claims against CMA and Ganci for violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The SEC previously settled charges against former District CFO Everton Sewell who, without admitting or denying the allegations, agreed to a final judgment, which was entered on June 21, 2022, (a) enjoining him from future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, (b) enjoining him from participating in any issuance, purchase, offer, or sale of municipal securities, and participating in the preparation of any offering materials with respect to municipal securities among other things, and (c) ordering him to pay a $25,000 penalty. The SEC’s litigation was led by Eugene Hansen and Daniel Maher under the supervision of James Carlson, and the investigation was conducted by Cori Whitten, Warren Greth, Laura Cunningham, Jonathan Wilcox, and Creighton Papier of the Enforcement Division’s Public Finance Abuse Unit under the supervision of Ivonia Slade and Rebecca Olsen.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26205 / December 30, 2024 Securities and Exchange Commission v. City of Rochester, New York, Rosiland Brooks-Harris, Capital Markets Advisors, LLC, Richard Ganci, and Richard Tortora, No. 22-cv-6273 (W.D.N.Y. filed June 14, 2022) SEC Resolves Litigation Against City of Rochester, NY, its former Finance Director, and Municipal Advisor The SEC announced that it has resolved all pending litigation in the action it filed in the U.S. District Court for the Western District of New York on June 14, 2022 against the City of Rochester, NY and its former finance director Rosiland Brooks-Harris, and against a New York-based municipal advisor, Capital Markets Advisors, LLC (CMA), and two of its principals, Richard Tortora and Richard Ganci (CMA Defendants). In its Complaint, the SEC alleged that, in 2019, the City, Brooks-Harris, CMA and Ganci misled investors with bond offering documents that included outdated financial statements for the Rochester City School District (District) and did not indicate that the District was experiencing financial distress due to overspending on teacher salaries. The SEC alleged that, in connection with the alleged bond offering conduct, the City and Brooks-Harris violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC alleged that, in connection with the alleged bond offering conduct, Ganci and CMA violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, Section 15B(c)(1) of the Exchange Act, and MSRB Rules G-17 and G-42. The SEC’s Complaint separately alleged that the CMA Defendants failed to disclose to nearly 200 municipal clients that CMA had material conflicts of interest arising from its compensation arrangements. The SEC alleged that, by this conduct, the CMA Defendants violated Section 15B(c)(1) of the Exchange Act, MSRB Rules G-17, G-42 and G-44. As previously announced, on April 15, 2024, the Court found that the CMA Defendants violated those provisions in connection with their failure to disclose material conflicts. On October 16, 2024, the Court entered a final judgment by consent against the City and Brooks-Harris. The City, without admitting or denying the allegations in the Complaint, consented to the entry of the final judgment, which enjoined it from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Brooks-Harris, without admitting or denying the allegations, consented to the entry of the final judgment, which enjoined her from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Court also entered a conduct-based injunction against Brooks-Harris, enjoining her from participating in any issuance, purchase, offer, or sale of municipal securities, and participating in the preparation of any offering materials with respect to municipal securities among other things. On December 26, 2024, the court entered a final judgment by consent against the CMA Defendants. The CMA Defendants, without admitting or denying the allegations in the Complaint, consented to the entry of the final judgment which: (a) enjoined them from future violations of Section 15B(c)(1) of the Exchange Act and MSRB Rules G-17, G-42, and G-44, and (b) ordered civil penalties of $175,000 as to CMA, $30,000 as to Ganci, and $30,000 as to Tortora. As part of the settlement, the SEC dismissed its claims against CMA and Ganci for violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The SEC previously settled charges against former District CFO Everton Sewell who, without admitting or denying the allegations, agreed to a final judgment, which was entered on June 21, 2022, (a) enjoining him from future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, (b) enjoining him from participating in any issuance, purchase, offer, or sale of municipal securities, and participating in the preparation of any offering materials with respect to municipal securities among other things, and (c) ordering him to pay a $25,000 penalty. The SEC’s litigation was led by Eugene Hansen and Daniel Maher under the supervision of James Carlson, and the investigation was conducted by Cori Whitten, Warren Greth, Laura Cunningham, Jonathan Wilcox, and Creighton Papier of the Enforcement Division’s Public Finance Abuse Unit under the supervision of Ivonia Slade and Rebecca Olsen.