Securities Regulation Daily Wrap Up, ENFORCEMENT—SEC fines 12 municipal advisors over $1.3M for recordkeeping violations and supervision failures, (Sep 17, 2024)
Organizations Mentioned:Acacia Financial Group Inc. | CSG Advisors Inc. | CSG Advisors, Inc. | Caine Mitter & Associates, Inc. | Caine Mitter and Associates Inc. | Kaufman Hall & Associates LLC | Montague DeRose & Associates LLC | PFM Financial Advisors LLC | Phoenix Advisors LLC | Phoenix Advisors, LLC | Ponder & Co. | Ponder & Company | Public Resources Advisory Group Inc. | Public Resources Advisory Group, Inc. | Specialized Public Finance Inc. | Zions Public Finance Inc. | cfX Inc.
The settlements ranged from $40,000 to $324,00 per firm.
The SEC has charged 12 municipal advisory firms for failing to properly maintain and preserve electronic communications. The violations, which involved personnel at various levels, were related to recordkeeping requirements essential for SEC inspections and ensuring compliance with municipal advisory activity regulations. As part of the settlement, the firms agreed to pay more than $1.3 million in combined civil penalties and implement improvements to their compliance policies.
The SEC orders detail that the firms admitted to the violations and acknowledged that their conduct breached federal recordkeeping provisions. Penalties ranged from $40,000 to $324,000, with notable firms like Acacia Financial Group, Kaufman Hall & Associates, and PFM Financial Advisors among those charged. In addition to the financial penalties, the firms were censured and ordered to cease and desist from future violations of relevant recordkeeping rules.
Rebecca Olsen, Deputy Chief of the SEC’s Division of Enforcement Public Finance Abuse Unit, emphasized the importance of maintaining accurate records: “The books and records requirements are critical to facilitating Commission inspections and examinations of municipal advisors and in evaluating a municipal advisor’s compliance with the applicable federal securities laws.” Olsen also urged firms to review their recordkeeping practices related to off-channel communications and to self-report any deficiencies to the SEC.
In addition to financial penalties, the firms were charged with supervisory failures and were directed to improve compliance processes to prevent future violations. These actions underscore the SEC’s commitment to enforcing strict recordkeeping standards to safeguard the integrity of municipal advisory services.
Companies: Acacia Financial Group Inc.; Caine Mitter and Associates Inc.; cfX Inc.; CSG Advisors Inc.; Kaufman Hall & Associates LLC; Ponder & Company; Montague DeRose & Associates LLC; PFM Financial Advisors LLC; Phoenix Advisors LLC; Public Resources Advisory Group Inc.; Specialized Public Finance Inc.; Zions Public Finance Inc.
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