SEC Charges Firm and Two Principals in First-Ever Actions Enforcing Rule on Duties of Municipal Advisors

The Securities and Exchange Commission today charged a Texas- and Colorado-based municipal advisor, Choice Advisors LLC, and its two principals, Matthias O'Meara and Paula Permenter, with violating their duties, engaging in unregistered municipal advisory activities, and related misconduct with respect to Choice's charter school clients. The actions are the first-ever SEC cases enforcing Municipal Securities Rulemaking Board Rule G-42 on the duties of non-solicitor municipal advisors. The SEC's complaint alleges that, in May 2018, O'Meara and Permenter left their employment at a national municipal underwriting firm to start Choice, a new municipal advisor focused on charter schools. According to the SEC's complaint and order, O'Meara and Permenter entered into an impermissible fee-splitting arrangement with their former employer.