SEC v. CHOICE ADVISORS

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
CHOICE ADVISORS, LLC, and
MATTHIAS O’MEARA,
Defendants.
 Case No.:  21-CV-1669-JO-MSB

ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFF’S
MOTION FOR ENTRY OF FINAL
JUDGMENT INCLUDING CERTAIN
REMEDIES

Plaintiff  Securities  and  Exchange  Commission  (“SEC”)  brought  a  civil  law
enforcement  action  against  municipal  advisors,  Defendants  Choice  Advisors,  LLC
(“Choice”) and Matthias O’Meara, alleging they violated securities laws and breached their
fiduciary duties in providing  services  to  their  charter  school  clients.    Dkt. 1  (“Compl.”).
After the Court granted partial summary judgment in favor of the SEC, the SEC moved for
final  entry  of  judgment  seeking  injunctive  relief,  disgorgement,  and  penalties  against
Defendants.  Dkt. 90.  For the reasons set forth below, the Court issues a final judgement
against Defendants granting in part and denying in part the relief requested by the SEC.
///
///

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I.    PROCEDURAL HISTORY
On April 15, 2024, the Court granted partial summary judgment on several of the
SEC’s  claims.    Dkt.  89 (“ MSJ  Order”).    It  found  Defendants  (1) performed  municipal
advisory services for their school clients without being registered to provide these services
as required by law; (2) entered into an impermissible agreement to split fees with a bank
underwriter, BB&T; (3) provided municipal advisory services to its school clients while
O’Meara was still employed by BB&T; and (4) failed to disclose the material conflicts of
interest created by the above to their school clients.  Id. at   9:23–11:22, 15:21–16:7, 19:1–
23:15, 24:21–25:12.  Based on this    conduct, the Court granted summary judgment in favor
of the SEC on its second, fifth, sixth, and seventh claims against Choice and O’Meara for
violations  of  (1)  Section  15B(c)(1)  of  the  Securities  Exchange  Act  of  1934  (“Exchange
Act”),  15 U.S.C.  §  78o-4(c)(1);  (2)   Municipal Securities  Rulemaking  Board  (“MSRB”)
Rule G-17; and (3) MSRB Rules G-42(b)(i)(D), (b)(i)(F), (c)(i-ii)  , (e)(i)(D).  Id. at 15:21–
16:7, 19:1–23:15, 24:21–25:12.  The Court also granted summary judgment in favor of the
SEC  on  its  third  and  fourth  claims  against  Choice  only  for  violations  of  (1)  Section
15B(a)(1)(B) of the Exchange Act, 15 U.S.C. § 78o-4(a)(1)(B), and (2) MSRB Rule A-12.
Id. at    9:23–11:22.
On June 7, 2024, the SEC subsequently dismissed its first claim against Choice and
O’Meara for violations of Section 15B(a)(5) of the Exchange Act, 15 U.S.C. § 78o-4(a),
and its    eighth  claim  against  only O’Meara  for  aiding  and  abetting  Choice’s  failure  to
register in violation of Section 15B(a)(1)(B) and (c)(1) of the Exchange Act, 15 U.S.C. §
78o-4(a)(1)(B) and (c)(1), and MSRB Rule A-12.  Dkts. 93, 94.
Following the resolution of all claims as set forth above, the SEC requested a final
judgment   imposing the   following   remedies:   (1)    a permanent   injunction   enjoining
Defendants from future violations of the federal securities laws; (2) disgorgement in the
amount of $133,149 plus $44,150 in    prejudgment interest from O’Meara and disgorgement
in  the  amount  of  $79,889 plus  $26,490 in  prejudgment  interest from  Choice;  and  (3)
imposition of a civil penalty of $133,149 against O’Meara and $250,000 against Choice.

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Dkt. 90-1 at    6:1–9, 7:7–8:4, 17:21–20:15, 23:11–18 (“Mot. for J.”).  On July 17, 2024, the
Court held an evidentiary hearing on O’Meara’s testimony regarding the sincerity of his
assurances  against  future  violations,  and  oral  argument  on  the  SEC’s  motion  requesting
final judgment.  Dkt. 99.  For the reasons stated on the record at the July 17, 2024 hearing
and summarized below, the Court issues a final judgment granting in part and denying in
part Plaintiff’s request for penalties.
II.  DISCUSSION
A.  Injunctive Relief
The  SEC  requests  that  the  Court  enjoin  Defendants  from  further  violations of  the
federal securities laws.  Mot. for J. at 6–10.  Injunctive relief against future securities law
violations is the “primary statutory remedy for violations of the federal securities laws.”
SEC v.   Pattison, No. C-08-4238 EMC, 2011 WL 723600, at *1 (N.D. Cal. Feb. 23, 2011),
aff’d  sub  nom.  SEC v. Sabhlok,  495  F.  App’x  786 (9th  Cir.  2012)  (citing  to  SEC v.
Randolph, 736 F.2d 525, 529 (9th Cir. 1984)); 15 U.S.C. § 78u(d).  The Court is authorized
to order permanent injunctions pursuant to Section 21(d) of the Exchange Act, 15 U.S.C.
§  78u(d).    Such  relief  may  be  granted  based  upon  the  SEC’s  showing  that  there  is  a
“reasonable likelihood”   of future violations.  SEC v. Fehn, 97 F.3d 1276, 1295 (9th Cir.
1996); SEC v.   Murphy, 626 F.2d 633, 655 (9th Cir. 1980) (“Murphy I”).  “In predicting the
likelihood  of  future  violations,”   the  court  “must  assess the  totality  of  the  circumstances
surrounding  the  defendant  and  his  violations,”  including: “(1)  the  degree  of  scienter
involved;  (2)  the  isolated  or  recurrent  nature  of  the  infraction;  (3)  the  defendant’s
recognition  of  the  wrongful nature of his conduct;  (4)  the  likelihood, because  of
defendant’s professional occupation, that future  violations  might  occur;  and  (5)  the
sincerity  of  his  assurances  against  future  violations.”    Fehn,  97  F.3d  at  1295  (citing  to
Murphy I, 626 F.2d at 655).
The Court finds the Murphy and Fehn factors weigh in favor of enjoining Defendants
from future securities law violations for the following reasons.
///

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1. Scienter Regarding Past Conduct
The Court first considers Defendants’ scienter in determining whether their conduct
merits injunctive relief.  Aaron v. SEC, 466 U.S. 680, 701 (1980) (Courts “may consider
scienter or lack of it as one of the aggravating or mitigating factors to be taken into account
in exercising its equitable discretion in deciding whether or not to grant injunctive relief.”).
In  the  context  of  securities  laws,  “scienter”  is generally  defined  as  the  “mental  state
embracing intent to deceive, manipulate, or defraud.”  Ernst & Ernst v.   Hochfelder, 425
U.S. 185, 193–94 n.12 (1976).
Here,  Defendants  knew  they  entered  into  an  agreement  to  split  fees  with  the
underwriter and that, for a short period, O’Meara was employed by both the underwriter
and  his  school  clients.    MSJ  Order  at  12–16,  20:17–23:15.    Regardless  of  whether
Defendants knew  that  these  arrangements  violated  the  law,  their  actions demonstrated  a
disregard for the conflicts of interest created by such an arrangement and its potential to
financially  disadvantage  their  clients.      MSJ  Order at  12–16.    As  the  Court  found  at
summary  judgment,  Defendants also knowingly engaged  in  municipal  advisory  services
without  being  properly  registered  and withheld  this  important  information  from  their
clients.  MSJ Order 9:23–11:22, 19:1–20:16.  As seen in emails between Defendants and
the lawyer they retained to assist with their registrations, Defendants were well aware that
they lacked registration status while representing their charter school clients.  Dkts. 62-11,
62 12,  Exs.  I,   J  to  SEC’s  Summ.  J.  Mt.  (O’Meara  responding  “We  are  legit!!!,”  to  his
lawyer’s update that their  registration  was  finally  completed  five  months  after  engaging
clients).
While the Court finds credible O’Meara assertions that he did not intend to cheat,
injure,   or   financially   disadvantage   their   clients, Defendants’   actions   nevertheless
demonstrate a disregard for (1) compliance with regulations intended to protect their clients
and (2) their obligation to honor the fiduciary duties they owed to their clients.  See MSJ
Order  at  10:17–11:14, 16:8–23:15.   Although  Defendants  may  have  not  had  a  specific
intent to cheat their clients, they did intend to obtain and get paid for work that they were

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not legally permitted to perform and hid this fact from their clients.  See MSJ Order 10:17–
11:14; 19:1–23:15.  As a sophisticated actor in the municipal securities industry O’Meara
should  have  been  aware  of the potential conflicts  of  interest  posed  by  his  overlapping
employment and fee-splitting agreement with the bank that would underwrite the loan for
these clients.  See Dkt. 96-1 (“Defs.’ Resp. Mot. Entry of Final J.”)  at 6:15–7:3.  Yet the
engagement letters Defendants sent to both school clients affirmatively misrepresented that
Defendants had no potential conflicts of interest, stating that (1) “Choice Advisors has no
known actual or potential material conflicts of interest that might impair its ability either
to  render  unbiased  or  competent  advice  or  to fulfill  its  fiduciary  duty  to  Client”  and  (2)
“Choice Advisors is not aware of any other engagement or relationship Choice Advisors
has that might impair [its]  ability to either to render unbiased or competent advice or to
fulfill its fiduciary duty to [its client].”  Dkts. 62-21, 62-24, Ex. S, V to SEC’s Summ. J.
Mtn.    As  the  Court  found  at  summary  judgment,  this  information  was  critical  to  Bella
Mente’s  ability  to  evaluate  whether  Defendants  could  adequately  serve  its  best  interests
while O’Meara was still acting as an underwriter for BB&T.  MSJ Order at 22:11–23:5.
By   misrepresenting   and withholding information   about   O’Meara’s fee-splitting
arrangement  and overlapping  employment  with  the  underwriter,  Defendants  knew  or
should have known that they prevented their clients from deciding for themselves whether
they wanted to proceed with an advisor who was operating in a dual role and had conflicts
of interest that could affect their representation.   MSJ Order 19:1–23:5; SEC v.   Cap. Gains
Rsch. Bureau, Inc., 375 U.S. 180, 196–197 (1963) (reasoning investors should be allowed
to  evaluate  whether  their  advisor  had  overlapping  motivations  and  was  “serving  two
masters or only one”)(internal citations omitted).
For the above reasons, the Court finds Defendants acted with a culpable degree of
scienter  in  their  dealings  with  their  two  charter  school  clients  and  this  factor  weighs  in
favor of an injunction.
///
///

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2. Isolated or Recurrent Nature of the Violations
Next, in weighing the need to issue an injunction in this case, the Court considers
whether Defendants’ violations were isolated or recurrent in nature.  While there is “[n]o
per se rule requiring the issuance of an injunction upon the showing of [a] past violation,”
SEC  v.    Koracorp  Indus.,  Inc., 575  F.2d  692,  701 (9th Cir.), cert.  denied,  439  U.S.  953
(1978), “[t]he existence of past violations may give rise to an inference that there will be
future violations[. ]” Murphy I, 626 F.2d at 655.  “[T]he fact that the defendant is currently
complying with the securities laws does not preclude an injunction.”  Id.; Fehn, 97 F.3d at
1295.
The Court acknowledges the violations here concerned only two clients and occurred
at the outset of O’Meara’s career as a municipal advisor.  MSJ Order at 2:6–10, 3:7–5:10.
But  the  Court  also  notes  that  this  case  did not  concern  a  one-time  mistake  but  instead
involved  several  instances where Defendants  disregarded their  legal  obligations  and
fiduciary duties to their clients in favor of their own financial interests.  See MSJ Order at
3:7–6:5, 10:17–11:14; 19:1–23:15.  Also, although O’Meara was new to the role of being
a municipal advisor, he had been working as a bank underwriter dealing with municipal
clients long before making this career change.    MSJ Order at 3:7–13; Dkt. 62-4 at 26:15–
27:12  (“O’Meara Dep.  Tr.”)  ;  Defs.’  Resp.  Mot.  Entry  of  Final  J.  at  6:15–7:3.    As an
experienced and sophisticated actor in the municipal securities industry, O’Meara had, or
should have had, at least a basic grasp of fiduciary obligations at the time of his misconduct.
MSJ Order at 3:7–13; O’Meara Dep. Tr. at 26:15–27:12; Defs.’ Resp. Mot. Entry of Final
J.  at  6:15–7:3.    On  balance,  the  Court  finds  that  the  second Murphy  and Fehn  factor  is
either split evenly or weighs slightly in favor of a need for an injunction.
3. Recognition of the Wrongfulness of Conduct
Defendants’ failure to appreciate the wrongfulness of their conduct also weighs in
favor of an injunction.  The Ninth Circuit recognizes a wide range of factors a court may
consider with regard to this factor, including whether a defendant continues to blame others
or insist on the validity of his conduct.  See SEC v. Murphy, 50 F.4th 832, 851 (9th Cir.

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2022) (“Murphy II”) (district court acted within its discretion in determining a   defendants’
insistence   that   they   did nothing   wrong   outweighs   their   assurances   against   future
violations); Fehn, 97  F.3d  at  1296  (lack  of  remorse  may  be  inferred  from  a   defendant’s
continued  insistence  on  validity  of  his  conduct);  Murphy  I,  626  F.2d  at  656  (noting a
defendant’s continued insistence that he did nothing wrong supported the conclusion that
an   injunction was appropriate).
First,  despite  the  Court’s  ruling  on  liability,  O’Meara  and  Choice  continued  to
advance  arguments  that  minimized  their  wrongful  conduct, Defs.’  Resp.  Mot.  Entry  of
Final J. at 5:9–11, 5:15–6:2, 7:4–10:15, and blame others for their predicament, id.  at 5:9–
11, 5:15–6:2, 7:4–9:16.  Even after the Court found that the plain language of MSRB Rule
G-42  clearly  prohibited  Choice’s  fee-splitting arrangements,  MSJ  Order  at  13–15,
O’Meara continued to fault the lack of guidance from the SEC and MSRB.  Defs.’ Resp.
Mot. Entry of Final J. at 5:9–11, 8:4–9; Dkt. 96-3 at 6:12–26 (“O’Meara Decl.”).  O’Meara
also attempted to shift part of the blame for his registration violations onto  the length of
the registration process and the delays caused by his lawyer.  Defs.’ Resp. Mot. Entry of
Final J. at 7:4–8:2, 8:10–9:16; O’Meara Decl. at    4:18–6:11.
Second, O’Meara’s testimony after the Court’s summary judgment ruling indicates
that he still does not fully appreciate the problematic nature of his actions and his disservice
to his clients.    During  the  July 17, 2024 evidentiary  hearing,  he  asserted that his school
clients “got  what  they  paid  for,”   were  charged  a  fair  price in  the  market,  and  did  not
complain about this performance.  Dkt. 101 at 15:9–14 (“Tr. of July 17, 2024 Evidentiary
Hearing”).    This  characterization  demonstrates  a  fundamental  misunderstanding  of  what
transpired.    His  clients  did  not  in  fact  get what  they  paid  for  because  they  paid  for  a
registered municipal advisor that was legally permitted to provides these services.  See 15
U.S.C. § 78o-4(a)(1)(B) (stating that municipal advisors cannot “provide advice to or on
behalf of a municipal entity . . . with respect to municipal financial products or the issuance
of  municipal  securities  .  .  .  unless  the  municipal  advisor  is  registered”  with  the  SEC);
MSRB  Rule  A-12  (requiring  all  municipal  advisors  to  register  with  the  MSRB).    And

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whether their clients knew it or not, by law, they were entitled to a municipal advisor that
would not have divided loyalties and would not hide these conflicts from their clients.  See
15 U.S.C. § 78o-4(c)(1); MSRB Rule G-42; SEC v.   Sztrom, 538 F. Supp. 3d 1050, 1061
(S.D. Cal. 2021) (finding a reasonable investor would have considered it important to know
that the individual giving them investment advice and making trades on their behalf was
not associated with any registered investment adviser).  In light of Defendants’ continued
statements that the schools were treated fairly because the bond offerings they sought were
successfully closed, Tr. of July 17, 2024 Evidentiary Hearing at 15:9–14; O’Meara Decl.
at   7:10–16, the Court finds Defendants have not sufficiently understood the wrongfulness
of their  several  breaches  of  fiduciary duties  owed  to  their  clients.    The  Court  therefore
concludes that this lack of understanding weighs in favor of an injunction.
4. Defendants’ Continued Employment in Securities Industry
Next, Defendants’ plans to continue to provide municipal advisory services to school
clients weigh in favor of an injunction.  In this role, Defendants may engage future clients
who,  like  Liberty  Tree  Academy  and  Bella  Mente  Montessori,  may  be  smaller  charter
schools, new to bond offerings and/or unsophisticated with regard to the fiduciary duties
owed to them.  See Defs.’ Resp. Mot. Entry of Final J. at 15.  A municipal advisor’s role
includes  policing  itself  to  avoid  any  conflicts  of  interest  that  could  hurt  his clients  and
proactively counseling his clients on the potential for any such conflicts and consequences.
See MSRB Rule  G-42 Duties  of  Non-Solicitor  Municipal  Advisors  Supplementary
Materials .05 Conflicts       of       Interests, https://www.msrb.org/Rules-and-
Interpretations/MSRB   Rules/General/Rule-G-42   (last   visited   September   16,   2024)
(“Disclosures  of  conflicts  of  interest  by  a  municipal  advisor  to  its  municipal  entity  or
obligated person  client  must  be  sufficiently  detailed  to  inform  the  client  of  the  nature,
implications  and  potential  consequences  of  each  conflict[]”  and  “also  must  include  an
explanation of how the municipal advisor addresses or intends to manage or mitigate each
conflict.”).  Given that Defendants have failed these obligations in the past, MSJ Order at
19:1–23:15, and continue to show a lack of understanding of the problematic nature of their

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actions, Tr. of July 17, 2024 Evidentiary Hearing at 15:9–14; O’Meara Decl. at 7:10–16,
the Court finds that an injunction is necessary to protect any future clients including those
that may be less sophisticated first-time seekers of municipal bonds.  Fehn, 97 F.3d at 1296
(defendant’s continued  client  representation  in  the  same  area  tends  to  suggest  a  risk  of
future  violations).    For  these  reasons,  the  Court  finds  that  the  fourth  Murphy and Fehn
factor weighs in favor of an injunction.
5. Sincerity of Assurances Against Future Violations
While the Court accepts the sincerity of O’Meara’s future intentions to  comply with
his legal obligations and fiduciary duties, the Court finds that an injunction against Choice
and  O’Meara  individually  is  appropriate  and  needful given  their  past disregard  of  these
same obligations and their continued failure to appreciate the full wrongful nature of their
conduct.    Fehn,  97  F.3d  1276,  1296 (9th  Cir.  1996)  (noting  that without  more,  sincere
assurances of an intent to refrain from aiding and abetting future violations are insufficient
to militate against an injunction).
In sum, the Court finds that the  totality of the Murphy and Fehn  factors  weigh in
favor of imposing a permanent injunction against Defendants for future violations of the
federal securities laws.  Accordingly, the Court GRANTS the SEC’s request for permanent
injunction against Defendants O’Meara and Choice.
B.  Disgorgement and Prejudgment Interest
In addition to injunctive relief, the SEC also seeks disgorgement plus prejudgment
interest against Defendants O’Meara and Choice.  Mot. for J. at 16–19.  The Exchange Act
authorizes  the  Court  to  award disgorgement  in  an  amount  that does  not  exceed  a
wrongdoer’s net profits.  15 U.S.C. §§ 78u(d)(5),(7); Liu v. SEC, 140 S. Ct. 1936, 1940
(2020).    Unlike  damages,  the  primary  purpose  of  disgorgement is  not  to  compensate
investors or other victims; instead, its goal is to force a defendant to relinquish the amount
by which he was unjustly enriched.    See  SEC v.    Contorinis,  743  F.3d  296,  301  (2d  Cir.
2013)  (citing  FTC  v.  Bronson  Partners,  654  F.3d  359,  374  (2d  Cir.  2011));  Osborn  v.
Griffith, 865 F.3d 417, 453 (6th Cir. 2017) (citing SEC v. Cavanaugh, 445 F.3d 105, 117

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(2d Cir. 2006)).  The measure of disgorgement should be a reasonable calculation of the
profits from a defendant’s wrongdoing, less legitimate business expenses, if any.  Liu, 140
S.  Ct. at    1946,  1950;  SEC  v. Giguire,  et  al.,  No. 18-CV-1530-WQH-JLB,  2024  WL
3550395, at *5 (S.D. Cal. June 11, 2024).  Once the SEC meets its burden of presenting a
calculation   that   reasonably   approximates   the   defendant’s   illegal profits   from   the
wrongdoing,  “the  burden  shifts  to  the  defendant[]  to  demonstrate  that  the  disgorgement
figure was not a reasonable approximation.”  Id.
Here,  the  SEC  has  provided  the  Court  a  reasonable  calculation  of  disgorgement
based  on  the  gross  sums  received  by  Choice,  including  a  breakdown of  the  amount  that
flowed to O’Meara, $133,149, and that remained with Choice, $79,889.  See Mot. for J. at
23–19.    Defendants  do  not  dispute  the  accuracy  of  these  calculations.    See Defs.’  Resp.
Mot. Entry of Final J.  Although Defendants had the opportunity to subtract any legitimate
business expenses from the gross amounts calculated by the SEC, they chose not to.  Tr. of
July 17, 2024 Evidentiary Hearing at 21:8–22:3.  The SEC’s calculation, therefore remains
the only and, therefore, the most reasonable calculation of ill-gotten gains available to the
Court.  See SEC v. World Tree Fin., L.L.C., 43 F.4th 448, 467 (5th Cir. 2022) (for the court
to consider deducting legitimate business expenses, defendant must first identify any such
expenses); SEC v. Fowler, 6 F.4th 255, 267 (2d Cir. 2021) (same).
In  considering  the  specific  facts  of  this  case  as  discussed  above  and  the  public
interest in divesting wrongdoers of unjust enrichment, the Court finds that disgorgement in
the amount requested by the SEC is    fair and reasonable.  The Court also finds the SEC’s
request  for  prejudgment interest to be appropriate as  wrongdoers  should  not  profit  from
their illegal activities by receiving an interest free loan.  Contorinis, 743 F.3d at 307–08
(prejudgment interest is designed to deprive a “wrongdoer of the benefit of holding the
///
///
///
///

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illicit gains over time by reasonably approximating the cost of borrowing such gain from
the government”).
1

Accordingly,  the  Court  GRANTS the  SEC’s  requests  for  disgorgement  in the
amount of $79,899 plus $26,490 in prejudgment interest from Choice and disgorgement in
the amount of $133,149 plus $44,150 in prejudgment interest from O’Meara.
C.  Civil Monetary Penalty
Finally, the SEC also requests the Court impose civil monetary penalties against both
Choice and O’Meara.  The Court may impose civil monetary penalties against any person
who  violates  the  Exchange  Act  after  considering  the  facts  and circumstances  of  the
particular case before it.  See 15 U.S.C. § 78u(d)(3).  Courts in the Ninth Circuit have found
it appropriate to couple  civil  penalties  with disgorgement.    See,  e.g.,  Giguire,  2024  WL
3550395, at *9–11; SEC v.   Jensen, No. 221CV06817CASGJSX, 2022 WL 1664258, at *7
(C.D. Cal. May 23, 2022); SEC v.   BIC Real Estate Dev. Corp., No. 1:16-cv-00344-LJO-
JLT, 2017 WL 1740136, at *4–7 (E.D. Cal. May 4, 2017); SEC v.   CMKM Diamonds, Inc.,
635 F. Supp. 2d 1185,1190–1191 (Nev. June 24, 2009); SEC v. Abacus Int’l Holding Corp.,
No.  C  99-02191,  2001  WL  940913,  at  *5  (N.D.  Cal.  Aug.  16,  2001).    Because
disgorgement  merely  approximates  a  return  to  the  status  quo,  civil  penalties  are  an
important additional remedy to deter the wrongdoer from similar conduct in the future.  See
Abacus  Int’l  Holding  Corp.,  2001  WL  940913,  at  *5.    This  Court  agrees  with  the
proposition  that  “[d]isgorgement  alone  is  an  insufficient  remedy,  since  there  is  little
deterrent in a rule that allows a violator to keep the profits if [it] is not detected, and requires
only a return of ill-gotten gains if [it] is caught.”  SEC v. Opulentica, LLC, 479 F. Supp. 2d
319, 331–32 (S.D.N.Y. 2007) (citations omitted).

1
 The SEC calculates prejudgment interest based on the rate established for tax underpayments to
the  Internal  Revenue  Service.    Mot.  for  J.  at  19:4–19  (citing 26  U.S.C. §    6621(a)(2);  17  C.F.R.  §
201.600(b)); see also SEC v. Platforms Wireless Int’l Corp., 617 F.3d 1072, 1099 (9th Cir. 2010) (district
court did not abuse its discretion by calculating prejudgment interest based on tax underpayment rate).

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In  evaluating  the  appropriateness  of  the  total  civil  penalty  amount,  courts employ
the  same  Murphy  and Fehn  factors  described  above  for  determining  the  propriety  of
injunctions.  See, e.g., Jensen, 2022 WL 1664258, at *19–20 (applying Murphy factors and
imposing a penalty equal to the gross amount of the defendants’ pecuniary gain); SEC v.
Wilde, No. SACV 11–0315 DOC(AJWx), 2012 WL 6621747, at *16 (C.D. Cal. Dec. 17,
2012)  (“[B]ecause  this  factor  test  su  pported the imposition of a permanent injunction, it
also supports the imposition of civil penalties.”); SEC v.   Abellan, 674 F. Supp. 2d 1213,
1222  (W.D.  Wash.  2009)  (“Like  a  permanent  injunction,  civil  penalties  are  imposed  to
deter  the  wrongdoer  from  similar  violations  in  the  future;  therefore  those  same  factors
governing the imposition of a permanent injunction apply here.”); CMKM Diamonds, Inc.,
635 F. Supp. 2d at 1192 (same).
Based on the same Murphy and Fehn findings discussed above, the Court imposes
civil penalties against Choice in the amount of $79,899 and against O’Meara in the amount
of $133,149.  The Court concludes that the additional deterrence of penalties is warranted
in  this  case  because,  as  discussed  above,  Defendants  engaged  in  several  instances  of
knowing  misconduct  and  demonstrated  disregard  of  their  legal  obligations,  fiduciary
duties, and the potential harmful effects on their clients, supra Section II.A.  They also fail
to  demonstrate  an  appreciation  of  the  wrongfulness  of  their  actions.    Defs.’  Resp.  Mot.
Entry of Final J. at 5:9–11, 5:15–6:2, 7:4–10:15.  Thus, to deter future misconduct and help
restore  confidence  in  the  municipal  securities  industry,  the  Court  imposes  the  above
penalties.    SEC  v.    Spyglass Equity  Sys.,  Inc.,  No.  211CV02371JAKMAN,  2012  WL
13008422, at *3 (C.D. Cal. Apr. 5, 2012) (citing SEC v.   Palmisano, 135 F.3d 860, 866 (2d
Cir. 1998) (“The purposes of civil penalties are to punish the individual violator as well as
deter future violations and thereby further the goals of encouraging investor confidence,
increasing the efficiency of financial markets, and promoting the stability of the securities
industry.”) (internal citations omitted)).
While  Defendants  argue  the  Court  should  consider  Defendants’  ability  to  pay  in
determining whether penalties are  appropriate,  they  failed  to  provide  the  Court  with  the

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information necessary to do so.  See Defs.’ Resp. Mot. Entry of Final J.  In general, when
challenging the imposition of a penalty, Defendants cannot rely on conclusory assertions
that they are unable to pay.  See SEC v.   RMR Asset Mgmt. Co., 553 F. Supp. 3d 820, 830
(S.D.  Cal.  2021),  aff’d sub  nom.  Murphy  II,  50  F.4th  832,  849  (  Defendants’  failure  to
substantiate their claims of financial hardship are in consequential to the court’s analysis of
civil penalties).  Here, rather than provide the Court with sufficient financial information
quantifying  the  Defendants’  savings,  assets,  and  ability  to  pay  a  penalty,  Defendants
elected  to  rely  on  general  assertions  about  litigation  costs  and  O’Meara being  forced  to
downsize his home.    Defs.’ Resp. Mot. Entry of Final J. at 19:25–20:15; Tr. of July 17,
2024 Evidentiary Hearing at 22:4–24:20.  Defendants therefore have not substantiated their
alleged inability to pay with quantifiable financial information,  and thus the Court cannot
assess an inability to pay based on assertions alone.  See, e.g., SEC v.   Universal Exp. Inc.,
646 F. Supp. 2d 552, 565 (S.D.N.Y. 2009) (even if the court considered “ability to pay” in
determining   remedies,   defendant’s   “self-serving   and   conclusory   assertions”   were
insufficient to support his claim of financial hardship); see also SEC v.   Brookstreet Sec.
Corp.,  664 F. App’x 654, 656 n.2 (9th Cir. 2016) (“Nothing in the Act requires courts to
impose penalties based on a wrongdoer’s illicit gain or ability to pay.”).
Accordingly, the Court GRANTS IN PART the SEC’s request and imposes a civil
penalty of $133,149 against O’Meara and $79,899 against Choice.
2

2
 The Court declines to conduct an analysis of the number of violations that occurred and whether
a first-tier or second-tier penalty is applicable pursuant to 15 § 78u(d)(3)(B).  The penalty imposed by the
Court in this case is well within the limits of both the first-tier and second-tier penalty for just one violation
of the Exchange Act because the gross pecuniary gain Defendants received for all of their violations was
$133,149 to O’Meara and $79,889 to Choice.  See Mot. for J. at 23:19–24:3; 15 §§ 78u(d)(3)(B)(i),(ii);
Inflation  Adjustments  to  the  Civil  Monetary  Penalties  Administered  by  the  Securities  and  Exchange
Commission (as of January 15, 2024), https://www.sec.gov/enforce/civil-penalties-inflation-adjustments
(last accessed September 17, 2024)(setting forth that each violation of a first-tier penalty “shall not exceed
the greater of” (I) $11,524 for a natural person, and $115,231 for corporations, or “(II) the gross amount
of pecuniary gain to such defendant as a result of the violation” and a second-tier penalty “shall not exceed
the greater of” (I) $115,231 for a natural person, and $576,158 for corporations, or “(II) the gross amount
of pecuniary gain to such defendant as a result of the violation.”)

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III.  CONCLUSON
Based on the above, the Court:
1. GRANTS the SEC’s request for a permanent injunction against both Defendants
as follows in the attached addendum;
2. GRANTS  the SEC’s request for disgorgement and prejudgment interest in the
amounts of (1) $179,081 from O’Meara, composed of $133,149 in disgorgement
and $45,932 in prejudgment interest; and (2) $107,448 from Choice, composed
of $79,889 in disgorgement and $27,559 in prejudgment interest; and
3. GRANTS the SEC’s request for civil penalties in the amount of $79,889 from
Choice and $133,491 from O’Meara.
The  Court  also  issues  a  final  judgment in  this  case  including  the  above  relief  and
ORDERS the Clerk of the Court to CLOSE this case.
 IT IS SO ORDERED.
Dated: September 23, 2024

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
CHOICE ADVISORS, LLC, and
MATTHIAS O’MEARA,
Defendants.
 Case No.:  21-CV-1669-JO-MSB

INJUNCTION AGAINST
DEFENDANT CHOICE ADVISORS,
LLC AND MATTHIAS O’MEARA

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

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(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

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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;

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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 $26,490.  The Court further
imposes on Defendant Choice a civil penalty in the amount of $250,000 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 $356,379 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 $44,150.  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 $310,448 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:
///

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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.
///

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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.
Dated: September 23, 2024

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

v. 

CHOICE ADVISORS, LLC, and 
MATTHIAS O’MEARA, 

Defendants. 

 Case No.:  21-CV-1669-JO-MSB 
 
ORDER GRANTING IN PART AND 
DENYING IN PART PLAINTIFF’S 
MOTION FOR ENTRY OF FINAL 
JUDGMENT INCLUDING CERTAIN 
REMEDIES 
 

 

Plaintiff Securities and Exchange Commission (“SEC”) brought a civil law 

enforcement action against municipal advisors, Defendants Choice Advisors, LLC 

(“Choice”) and Matthias O’Meara, alleging they violated securities laws and breached their 

fiduciary duties in providing services to their charter school clients.  Dkt. 1 (“Compl.”).  

After the Court granted partial summary judgment in favor of the SEC, the SEC moved for 

final entry of judgment seeking injunctive relief, disgorgement, and penalties against 

Defendants.  Dkt. 90.  For the reasons set forth below, the Court issues a final judgement 

against Defendants granting in part and denying in part the relief requested by the SEC. 

/// 

/// 

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I.  PROCEDURAL HISTORY 

On April 15, 2024, the Court granted partial summary judgment on several of the 

SEC’s claims.  Dkt. 89 (“MSJ Order”).  It found Defendants (1) performed municipal 

advisory services for their school clients without being registered to provide these services 

as required by law; (2) entered into an impermissible agreement to split fees with a bank 

underwriter, BB&T; (3) provided municipal advisory services to its school clients while 

O’Meara was still employed by BB&T; and (4) failed to disclose the material conflicts of 

interest created by the above to their school clients.  Id. at 9:23–11:22, 15:21–16:7, 19:1–

23:15, 24:21–25:12.  Based on this conduct, the Court granted summary judgment in favor 

of the SEC on its second, fifth, sixth, and seventh claims against Choice and O’Meara for 

violations of (1) Section 15B(c)(1) of the Securities Exchange Act of 1934 (“Exchange 

Act”), 15 U.S.C. § 78o-4(c)(1); (2) Municipal Securities Rulemaking Board (“MSRB”) 

Rule G-17; and (3) MSRB Rules G-42(b)(i)(D), (b)(i)(F), (c)(i-ii), (e)(i)(D).  Id. at 15:21–

16:7, 19:1–23:15, 24:21–25:12.  The Court also granted summary judgment in favor of the 

SEC on its third and fourth claims against Choice only for violations of (1) Section 

15B(a)(1)(B) of the Exchange Act, 15 U.S.C. § 78o-4(a)(1)(B), and (2) MSRB Rule A-12.  

Id. at 9:23–11:22. 

On June 7, 2024, the SEC subsequently dismissed its first claim against Choice and 

O’Meara for violations of Section 15B(a)(5) of the Exchange Act, 15 U.S.C. § 78o-4(a), 

and its eighth claim against only O’Meara for aiding and abetting Choice’s failure to 

register in violation of Section 15B(a)(1)(B) and (c)(1) of the Exchange Act, 15 U.S.C. § 

78o-4(a)(1)(B) and (c)(1), and MSRB Rule A-12.  Dkts. 93, 94. 

Following the resolution of all claims as set forth above, the SEC requested a final 

judgment imposing the following remedies: (1) a permanent injunction enjoining 

Defendants from future violations of the federal securities laws; (2) disgorgement in the 

amount of $133,149 plus $44,150 in prejudgment interest from O’Meara and disgorgement 

in the amount of $79,889 plus $26,490 in prejudgment interest from Choice; and (3) 

imposition of a civil penalty of $133,149 against O’Meara and $250,000 against Choice.  

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Dkt. 90-1 at 6:1–9, 7:7–8:4, 17:21–20:15, 23:11–18 (“Mot. for J.”).  On July 17, 2024, the 

Court held an evidentiary hearing on O’Meara’s testimony regarding the sincerity of his 

assurances against future violations, and oral argument on the SEC’s motion requesting 

final judgment.  Dkt. 99.  For the reasons stated on the record at the July 17, 2024 hearing 

and summarized below, the Court issues a final judgment granting in part and denying in 

part Plaintiff’s request for penalties. 

II.  DISCUSSION 

A.  Injunctive Relief 

The SEC requests that the Court enjoin Defendants from further violations of the 

federal securities laws.  Mot. for J. at 6–10.  Injunctive relief against future securities law 

violations is the “primary statutory remedy for violations of the federal securities laws.”  

SEC v. Pattison, No. C-08-4238 EMC, 2011 WL 723600, at *1 (N.D. Cal. Feb. 23, 2011), 

aff’d sub nom. SEC v. Sabhlok, 495 F. App’x 786 (9th Cir. 2012) (citing to SEC v. 

Randolph, 736 F.2d 525, 529 (9th Cir. 1984)); 15 U.S.C. § 78u(d).  The Court is authorized 

to order permanent injunctions pursuant to Section 21(d) of the Exchange Act, 15 U.S.C. 

§ 78u(d).  Such relief may be granted based upon the SEC’s showing that there is a 

“reasonable likelihood” of future violations.  SEC v. Fehn, 97 F.3d 1276, 1295 (9th Cir. 

1996); SEC v. Murphy, 626 F.2d 633, 655 (9th Cir. 1980) (“Murphy I”).  “In predicting the 

likelihood of future violations,” the court “must assess the totality of the circumstances 

surrounding the defendant and his violations,” including: “(1) the degree of scienter 

involved; (2) the isolated or recurrent nature of the infraction; (3) the defendant’s 

recognition of the wrongful nature of his conduct; (4) the likelihood, because of 

defendant’s professional occupation, that future violations might occur; and (5) the 

sincerity of his assurances against future violations.”  Fehn, 97 F.3d at 1295 (citing to 

Murphy I, 626 F.2d at 655). 

The Court finds the Murphy and Fehn factors weigh in favor of enjoining Defendants 

from future securities law violations for the following reasons. 

/// 

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1. Scienter Regarding Past Conduct 

The Court first considers Defendants’ scienter in determining whether their conduct 

merits injunctive relief.  Aaron v. SEC, 466 U.S. 680, 701 (1980) (Courts “may consider 

scienter or lack of it as one of the aggravating or mitigating factors to be taken into account 

in exercising its equitable discretion in deciding whether or not to grant injunctive relief.”).  

In the context of securities laws, “scienter” is generally defined as the “mental state 

embracing intent to deceive, manipulate, or defraud.”  Ernst & Ernst v. Hochfelder, 425 

U.S. 185, 193–94 n.12 (1976). 

Here, Defendants knew they entered into an agreement to split fees with the 

underwriter and that, for a short period, O’Meara was employed by both the underwriter 

and his school clients.  MSJ Order at 12–16, 20:17–23:15.  Regardless of whether 

Defendants knew that these arrangements violated the law, their actions demonstrated a 

disregard for the conflicts of interest created by such an arrangement and its potential to 

financially disadvantage their clients.  MSJ Order at 12–16.  As the Court found at 

summary judgment, Defendants also knowingly engaged in municipal advisory services 

without being properly registered and withheld this important information from their 

clients.  MSJ Order 9:23–11:22, 19:1–20:16.  As seen in emails between Defendants and 

the lawyer they retained to assist with their registrations, Defendants were well aware that 

they lacked registration status while representing their charter school clients.  Dkts. 62-11, 

62 12, Exs. I, J to SEC’s Summ. J. Mt. (O’Meara responding “We are legit!!!,” to his 

lawyer’s update that their registration was finally completed five months after engaging 

clients). 

While the Court finds credible O’Meara assertions that he did not intend to cheat, 

injure, or financially disadvantage their clients, Defendants’ actions nevertheless 

demonstrate a disregard for (1) compliance with regulations intended to protect their clients 

and (2) their obligation to honor the fiduciary duties they owed to their clients.  See MSJ 

Order at 10:17–11:14, 16:8–23:15.  Although Defendants may have not had a specific 

intent to cheat their clients, they did intend to obtain and get paid for work that they were 

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not legally permitted to perform and hid this fact from their clients.  See MSJ Order 10:17–

11:14; 19:1–23:15.  As a sophisticated actor in the municipal securities industry O’Meara 

should have been aware of the potential conflicts of interest posed by his overlapping 

employment and fee-splitting agreement with the bank that would underwrite the loan for 

these clients.  See Dkt. 96-1 (“Defs.’ Resp. Mot. Entry of Final J.”)  at 6:15–7:3.  Yet the 

engagement letters Defendants sent to both school clients affirmatively misrepresented that 

Defendants had no potential conflicts of interest, stating that (1) “Choice Advisors has no 

known actual or potential material conflicts of interest that might impair its ability either 

to render unbiased or competent advice or to fulfill its fiduciary duty to Client” and (2) 

“Choice Advisors is not aware of any other engagement or relationship Choice Advisors 

has that might impair [its] ability to either to render unbiased or competent advice or to 

fulfill its fiduciary duty to [its client].”  Dkts. 62-21, 62-24, Ex. S, V to SEC’s Summ. J. 

Mtn.  As the Court found at summary judgment, this information was critical to Bella 

Mente’s ability to evaluate whether Defendants could adequately serve its best interests 

while O’Meara was still acting as an underwriter for BB&T.  MSJ Order at 22:11–23:5.  

By misrepresenting and withholding information about O’Meara’s fee-splitting 

arrangement and overlapping employment with the underwriter, Defendants knew or 

should have known that they prevented their clients from deciding for themselves whether 

they wanted to proceed with an advisor who was operating in a dual role and had conflicts 

of interest that could affect their representation.   MSJ Order 19:1–23:5; SEC v. Cap. Gains 

Rsch. Bureau, Inc., 375 U.S. 180, 196–197 (1963) (reasoning investors should be allowed 

to evaluate whether their advisor had overlapping motivations and was “serving two 

masters or only one”)(internal citations omitted). 

For the above reasons, the Court finds Defendants acted with a culpable degree of 

scienter in their dealings with their two charter school clients and this factor weighs in 

favor of an injunction. 

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2. Isolated or Recurrent Nature of the Violations 

Next, in weighing the need to issue an injunction in this case, the Court considers 

whether Defendants’ violations were isolated or recurrent in nature.  While there is “[n]o 

per se rule requiring the issuance of an injunction upon the showing of [a] past violation,” 

SEC v. Koracorp Indus., Inc., 575 F.2d 692, 701 (9th Cir.), cert. denied, 439 U.S. 953 

(1978), “[t]he existence of past violations may give rise to an inference that there will be 

future violations[.]” Murphy I, 626 F.2d at 655.  “[T]he fact that the defendant is currently 

complying with the securities laws does not preclude an injunction.”  Id.; Fehn, 97 F.3d at 

1295. 

The Court acknowledges the violations here concerned only two clients and occurred 

at the outset of O’Meara’s career as a municipal advisor.  MSJ Order at 2:6–10, 3:7–5:10.  

But the Court also notes that this case did not concern a one-time mistake but instead 

involved several instances where Defendants disregarded their legal obligations and 

fiduciary duties to their clients in favor of their own financial interests.  See MSJ Order at 

3:7–6:5, 10:17–11:14; 19:1–23:15.  Also, although O’Meara was new to the role of being 

a municipal advisor, he had been working as a bank underwriter dealing with municipal 

clients long before making this career change.  MSJ Order at 3:7–13; Dkt. 62-4 at 26:15–

27:12 (“O’Meara Dep. Tr.”); Defs.’ Resp. Mot. Entry of Final J. at 6:15–7:3.  As an 

experienced and sophisticated actor in the municipal securities industry, O’Meara had, or 

should have had, at least a basic grasp of fiduciary obligations at the time of his misconduct.  

MSJ Order at 3:7–13; O’Meara Dep. Tr. at 26:15–27:12; Defs.’ Resp. Mot. Entry of Final 

J. at 6:15–7:3.  On balance, the Court finds that the second Murphy and Fehn factor is 

either split evenly or weighs slightly in favor of a need for an injunction.  

3. Recognition of the Wrongfulness of Conduct 

Defendants’ failure to appreciate the wrongfulness of their conduct also weighs in 

favor of an injunction.  The Ninth Circuit recognizes a wide range of factors a court may 

consider with regard to this factor, including whether a defendant continues to blame others 

or insist on the validity of his conduct.  See SEC v. Murphy, 50 F.4th 832, 851 (9th Cir. 

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2022) (“Murphy II”) (district court acted within its discretion in determining a defendants’ 

insistence that they did nothing wrong outweighs their assurances against future 

violations); Fehn, 97 F.3d at 1296 (lack of remorse may be inferred from a defendant’s 

continued insistence on validity of his conduct); Murphy I, 626 F.2d at 656 (noting a 

defendant’s continued insistence that he did nothing wrong supported the conclusion that 

an injunction was appropriate). 

First, despite the Court’s ruling on liability, O’Meara and Choice continued to 

advance arguments that minimized their wrongful conduct, Defs.’ Resp. Mot. Entry of 

Final J. at 5:9–11, 5:15–6:2, 7:4–10:15, and blame others for their predicament, id.  at 5:9–

11, 5:15–6:2, 7:4–9:16.  Even after the Court found that the plain language of MSRB Rule 

G-42 clearly prohibited Choice’s fee-splitting arrangements, MSJ Order at 13–15, 

O’Meara continued to fault the lack of guidance from the SEC and MSRB.  Defs.’ Resp. 

Mot. Entry of Final J. at 5:9–11, 8:4–9; Dkt. 96-3 at 6:12–26 (“O’Meara Decl.”).  O’Meara 

also attempted to shift part of the blame for his registration violations onto the length of 

the registration process and the delays caused by his lawyer.  Defs.’ Resp. Mot. Entry of 

Final J. at 7:4–8:2, 8:10–9:16; O’Meara Decl. at 4:18–6:11. 

Second, O’Meara’s testimony after the Court’s summary judgment ruling indicates 

that he still does not fully appreciate the problematic nature of his actions and his disservice 

to his clients.  During the July 17, 2024 evidentiary hearing, he asserted that his school 

clients “got what they paid for,” were charged a fair price in the market, and did not 

complain about this performance.  Dkt. 101 at 15:9–14 (“Tr. of July 17, 2024 Evidentiary 

Hearing”).  This characterization demonstrates a fundamental misunderstanding of what 

transpired.  His clients did not in fact get what they paid for because they paid for a 

registered municipal advisor that was legally permitted to provides these services.  See 15 

U.S.C. § 78o-4(a)(1)(B) (stating that municipal advisors cannot “provide advice to or on 

behalf of a municipal entity . . . with respect to municipal financial products or the issuance 

of municipal securities . . . unless the municipal advisor is registered” with the SEC); 

MSRB Rule A-12 (requiring all municipal advisors to register with the MSRB).  And 

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whether their clients knew it or not, by law, they were entitled to a municipal advisor that 

would not have divided loyalties and would not hide these conflicts from their clients.  See 

15 U.S.C. § 78o-4(c)(1); MSRB Rule G-42; SEC v. Sztrom, 538 F. Supp. 3d 1050, 1061 

(S.D. Cal. 2021) (finding a reasonable investor would have considered it important to know 

that the individual giving them investment advice and making trades on their behalf was 

not associated with any registered investment adviser).  In light of Defendants’ continued 

statements that the schools were treated fairly because the bond offerings they sought were 

successfully closed, Tr. of July 17, 2024 Evidentiary Hearing at 15:9–14; O’Meara Decl. 

at 7:10–16, the Court finds Defendants have not sufficiently understood the wrongfulness 

of their several breaches of fiduciary duties owed to their clients.  The Court therefore 

concludes that this lack of understanding weighs in favor of an injunction. 

4. Defendants’ Continued Employment in Securities Industry  

Next, Defendants’ plans to continue to provide municipal advisory services to school 

clients weigh in favor of an injunction.  In this role, Defendants may engage future clients 

who, like Liberty Tree Academy and Bella Mente Montessori, may be smaller charter 

schools, new to bond offerings and/or unsophisticated with regard to the fiduciary duties 

owed to them.  See Defs.’ Resp. Mot. Entry of Final J. at 15.  A municipal advisor’s role 

includes policing itself to avoid any conflicts of interest that could hurt his clients and 

proactively counseling his clients on the potential for any such conflicts and consequences.  

See MSRB Rule G-42 Duties of Non-Solicitor Municipal Advisors Supplementary 

Materials .05 Conflicts of Interests, https://www.msrb.org/Rules-and-

Interpretations/MSRB Rules/General/Rule-G-42 (last visited September 16, 2024) 

(“Disclosures of conflicts of interest by a municipal advisor to its municipal entity or 

obligated person client must be sufficiently detailed to inform the client of the nature, 

implications and potential consequences of each conflict[]” and “also must include an 

explanation of how the municipal advisor addresses or intends to manage or mitigate each 

conflict.”).  Given that Defendants have failed these obligations in the past, MSJ Order at 

19:1–23:15, and continue to show a lack of understanding of the problematic nature of their 

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actions, Tr. of July 17, 2024 Evidentiary Hearing at 15:9–14; O’Meara Decl. at 7:10–16, 

the Court finds that an injunction is necessary to protect any future clients including those 

that may be less sophisticated first-time seekers of municipal bonds.  Fehn, 97 F.3d at 1296 

(defendant’s continued client representation in the same area tends to suggest a risk of 

future violations).  For these reasons, the Court finds that the fourth Murphy and Fehn 

factor weighs in favor of an injunction. 

5. Sincerity of Assurances Against Future Violations 

While the Court accepts the sincerity of O’Meara’s future intentions to  comply with 

his legal obligations and fiduciary duties, the Court finds that an injunction against Choice 

and O’Meara individually is appropriate and needful given their past disregard of these 

same obligations and their continued failure to appreciate the full wrongful nature of their 

conduct.  Fehn, 97 F.3d 1276, 1296 (9th Cir. 1996) (noting that without more, sincere 

assurances of an intent to refrain from aiding and abetting future violations are insufficient 

to militate against an injunction). 

In sum, the Court finds that the totality of the Murphy and Fehn factors weigh in 

favor of imposing a permanent injunction against Defendants for future violations of the 

federal securities laws.  Accordingly, the Court GRANTS the SEC’s request for permanent 

injunction against Defendants O’Meara and Choice. 

B.  Disgorgement and Prejudgment Interest 

In addition to injunctive relief, the SEC also seeks disgorgement plus prejudgment 

interest against Defendants O’Meara and Choice.  Mot. for J. at 16–19.  The Exchange Act 

authorizes the Court to award disgorgement in an amount that does not exceed a 

wrongdoer’s net profits.  15 U.S.C. §§ 78u(d)(5),(7); Liu v. SEC, 140 S. Ct. 1936, 1940 

(2020).  Unlike damages, the primary purpose of disgorgement is not to compensate 

investors or other victims; instead, its goal is to force a defendant to relinquish the amount 

by which he was unjustly enriched.  See SEC v. Contorinis, 743 F.3d 296, 301 (2d Cir. 

2013) (citing FTC v. Bronson Partners, 654 F.3d 359, 374 (2d Cir. 2011)); Osborn v. 

Griffith, 865 F.3d 417, 453 (6th Cir. 2017) (citing SEC v. Cavanaugh, 445 F.3d 105, 117 

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(2d Cir. 2006)).  The measure of disgorgement should be a reasonable calculation of the 

profits from a defendant’s wrongdoing, less legitimate business expenses, if any.  Liu, 140 

S. Ct. at 1946, 1950; SEC v. Giguire, et al., No. 18-CV-1530-WQH-JLB, 2024 WL 

3550395, at *5 (S.D. Cal. June 11, 2024).  Once the SEC meets its burden of presenting a 

calculation that reasonably approximates the defendant’s illegal profits from the 

wrongdoing, “the burden shifts to the defendant[] to demonstrate that the disgorgement 

figure was not a reasonable approximation.”  Id. 

Here, the SEC has provided the Court a reasonable calculation of disgorgement 

based on the gross sums received by Choice, including a breakdown of the amount that 

flowed to O’Meara, $133,149, and that remained with Choice, $79,889.  See Mot. for J. at 

23–19.  Defendants do not dispute the accuracy of these calculations.  See Defs.’ Resp. 

Mot. Entry of Final J.  Although Defendants had the opportunity to subtract any legitimate 

business expenses from the gross amounts calculated by the SEC, they chose not to.  Tr. of 

July 17, 2024 Evidentiary Hearing at 21:8–22:3.  The SEC’s calculation, therefore remains 

the only and, therefore, the most reasonable calculation of ill-gotten gains available to the 

Court.  See SEC v. World Tree Fin., L.L.C., 43 F.4th 448, 467 (5th Cir. 2022) (for the court 

to consider deducting legitimate business expenses, defendant must first identify any such 

expenses); SEC v. Fowler, 6 F.4th 255, 267 (2d Cir. 2021) (same). 

In considering the specific facts of this case as discussed above and the public 

interest in divesting wrongdoers of unjust enrichment, the Court finds that disgorgement in 

the amount requested by the SEC is fair and reasonable.  The Court also finds the SEC’s 

request for prejudgment interest to be appropriate as wrongdoers should not profit from 

their illegal activities by receiving an interest free loan.  Contorinis, 743 F.3d at 307–08 

(prejudgment interest is designed to deprive a “wrongdoer of the benefit of holding the 

/// 

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/// 

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illicit gains over time by reasonably approximating the cost of borrowing such gain from 

the government”).1 

Accordingly, the Court GRANTS the SEC’s requests for disgorgement in the 

amount of $79,899 plus $26,490 in prejudgment interest from Choice and disgorgement in 

the amount of $133,149 plus $44,150 in prejudgment interest from O’Meara.  

C.  Civil Monetary Penalty 

Finally, the SEC also requests the Court impose civil monetary penalties against both 

Choice and O’Meara.  The Court may impose civil monetary penalties against any person 

who violates the Exchange Act after considering the facts and circumstances of the 

particular case before it.  See 15 U.S.C. § 78u(d)(3).  Courts in the Ninth Circuit have found 

it appropriate to couple civil penalties with disgorgement.  See, e.g., Giguire, 2024 WL 

3550395, at *9–11; SEC v. Jensen, No. 221CV06817CASGJSX, 2022 WL 1664258, at *7 

(C.D. Cal. May 23, 2022); SEC v. BIC Real Estate Dev. Corp., No. 1:16-cv-00344-LJO-

JLT, 2017 WL 1740136, at *4–7 (E.D. Cal. May 4, 2017); SEC v. CMKM Diamonds, Inc., 

635 F. Supp. 2d 1185,1190–1191 (Nev. June 24, 2009); SEC v. Abacus Int’l Holding Corp., 

No. C 99-02191, 2001 WL 940913, at *5 (N.D. Cal. Aug. 16, 2001).  Because 

disgorgement merely approximates a return to the status quo, civil penalties are an 

important additional remedy to deter the wrongdoer from similar conduct in the future.  See 

Abacus Int’l Holding Corp., 2001 WL 940913, at *5.  This Court agrees with the 

proposition that “[d]isgorgement alone is an insufficient remedy, since there is little 

deterrent in a rule that allows a violator to keep the profits if [it] is not detected, and requires 

only a return of ill-gotten gains if [it] is caught.”  SEC v. Opulentica, LLC, 479 F. Supp. 2d 

319, 331–32 (S.D.N.Y. 2007) (citations omitted). 

 

1 The SEC calculates prejudgment interest based on the rate established for tax underpayments to 
the Internal Revenue Service.  Mot. for J. at 19:4–19 (citing 26 U.S.C. § 6621(a)(2); 17 C.F.R. § 
201.600(b)); see also SEC v. Platforms Wireless Int’l Corp., 617 F.3d 1072, 1099 (9th Cir. 2010) (district 
court did not abuse its discretion by calculating prejudgment interest based on tax underpayment rate). 

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In evaluating the appropriateness of the total civil penalty amount, courts employ 

the same Murphy and Fehn factors described above for determining the propriety of 

injunctions.  See, e.g., Jensen, 2022 WL 1664258, at *19–20 (applying Murphy factors and 

imposing a penalty equal to the gross amount of the defendants’ pecuniary gain); SEC v. 

Wilde, No. SACV 11–0315 DOC(AJWx), 2012 WL 6621747, at *16 (C.D. Cal. Dec. 17, 

2012) (“[B]ecause this factor test supported the imposition of a permanent injunction, it 

also supports the imposition of civil penalties.”); SEC v. Abellan, 674 F. Supp. 2d 1213, 

1222 (W.D. Wash. 2009) (“Like a permanent injunction, civil penalties are imposed to 

deter the wrongdoer from similar violations in the future; therefore those same factors 

governing the imposition of a permanent injunction apply here.”); CMKM Diamonds, Inc., 

635 F. Supp. 2d at 1192 (same). 

Based on the same Murphy and Fehn findings discussed above, the Court imposes 

civil penalties against Choice in the amount of $79,899 and against O’Meara in the amount 

of $133,149.  The Court concludes that the additional deterrence of penalties is warranted 

in this case because, as discussed above, Defendants engaged in several instances of 

knowing misconduct and demonstrated disregard of their legal obligations, fiduciary 

duties, and the potential harmful effects on their clients, supra Section II.A.  They also fail 

to demonstrate an appreciation of the wrongfulness of their actions.  Defs.’ Resp. Mot. 

Entry of Final J. at 5:9–11, 5:15–6:2, 7:4–10:15.  Thus, to deter future misconduct and help 

restore confidence in the municipal securities industry, the Court imposes the above 

penalties.  SEC v. Spyglass Equity Sys., Inc., No. 211CV02371JAKMAN, 2012 WL 

13008422, at *3 (C.D. Cal. Apr. 5, 2012) (citing SEC v. Palmisano, 135 F.3d 860, 866 (2d 

Cir. 1998) (“The purposes of civil penalties are to punish the individual violator as well as 

deter future violations and thereby further the goals of encouraging investor confidence, 

increasing the efficiency of financial markets, and promoting the stability of the securities 

industry.”) (internal citations omitted)). 

While Defendants argue the Court should consider Defendants’ ability to pay in 

determining whether penalties are appropriate, they failed to provide the Court with the 

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information necessary to do so.  See Defs.’ Resp. Mot. Entry of Final J.  In general, when 

challenging the imposition of a penalty, Defendants cannot rely on conclusory assertions 

that they are unable to pay.  See SEC v. RMR Asset Mgmt. Co., 553 F. Supp. 3d 820, 830 

(S.D. Cal. 2021), aff’d sub nom. Murphy II, 50 F.4th 832, 849 (Defendants’ failure to 

substantiate their claims of financial hardship are inconsequential to the court’s analysis of 

civil penalties).  Here, rather than provide the Court with sufficient financial information 

quantifying the Defendants’ savings, assets, and ability to pay a penalty, Defendants 

elected to rely on general assertions about litigation costs and O’Meara being forced to 

downsize his home.  Defs.’ Resp. Mot. Entry of Final J. at 19:25–20:15; Tr. of July 17, 

2024 Evidentiary Hearing at 22:4–24:20.  Defendants therefore have not substantiated their 

alleged inability to pay with quantifiable financial information, and thus the Court cannot 

assess an inability to pay based on assertions alone.  See, e.g., SEC v. Universal Exp. Inc., 

646 F. Supp. 2d 552, 565 (S.D.N.Y. 2009) (even if the court considered “ability to pay” in 

determining remedies, defendant’s “self-serving and conclusory assertions” were 

insufficient to support his claim of financial hardship); see also SEC v. Brookstreet Sec. 

Corp., 664 F. App’x 654, 656 n.2 (9th Cir. 2016) (“Nothing in the Act requires courts to 

impose penalties based on a wrongdoer’s illicit gain or ability to pay.”). 

Accordingly, the Court GRANTS IN PART the SEC’s request and imposes a civil 

penalty of $133,149 against O’Meara and $79,899 against Choice.2  

 

2 The Court declines to conduct an analysis of the number of violations that occurred and whether 
a first-tier or second-tier penalty is applicable pursuant to 15 § 78u(d)(3)(B).  The penalty imposed by the 
Court in this case is well within the limits of both the first-tier and second-tier penalty for just one violation 
of the Exchange Act because the gross pecuniary gain Defendants received for all of their violations was 
$133,149 to O’Meara and $79,889 to Choice.  See Mot. for J. at 23:19–24:3; 15 §§ 78u(d)(3)(B)(i),(ii); 
Inflation Adjustments to the Civil Monetary Penalties Administered by the Securities and Exchange 
Commission (as of January 15, 2024), https://www.sec.gov/enforce/civil-penalties-inflation-adjustments 
(last accessed September 17, 2024)(setting forth that each violation of a first-tier penalty “shall not exceed 
the greater of” (I) $11,524 for a natural person, and $115,231 for corporations, or “(II) the gross amount 
of pecuniary gain to such defendant as a result of the violation” and a second-tier penalty “shall not exceed 
the greater of” (I) $115,231 for a natural person, and $576,158 for corporations, or “(II) the gross amount 
of pecuniary gain to such defendant as a result of the violation.”) 

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III.  CONCLUSON 

Based on the above, the Court: 

1. GRANTS the SEC’s request for a permanent injunction against both Defendants 

as follows in the attached addendum; 

2. GRANTS the SEC’s request for disgorgement and prejudgment interest in the 

amounts of (1) $179,081 from O’Meara, composed of $133,149 in disgorgement 

and $45,932 in prejudgment interest; and (2) $107,448 from Choice, composed 

of $79,889 in disgorgement and $27,559 in prejudgment interest; and 

3. GRANTS the SEC’s request for civil penalties in the amount of $79,889 from 

Choice and $133,491 from O’Meara. 

The Court also issues a final judgment in this case including the above relief and 

ORDERS the Clerk of the Court to CLOSE this case. 

 IT IS SO ORDERED. 

Dated: September 23, 2024 

 

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

v. 

CHOICE ADVISORS, LLC, and 
MATTHIAS O’MEARA, 

Defendants. 

 Case No.:  21-CV-1669-JO-MSB 
 
INJUNCTION AGAINST 
DEFENDANT CHOICE ADVISORS, 
LLC AND MATTHIAS O’MEARA 

 

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 

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(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 

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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; 

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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 $26,490.  The Court further 

imposes on Defendant Choice a civil penalty in the amount of $250,000 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 $356,379 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 $44,150.  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 $310,448 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: 

/// 

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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. 

/// 

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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. 

Dated: September 23, 2024 

 

 

 
 

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