ADMINISTRATIVE PROCEEDING

File No. 3-21717

September 25, 2023 –The Securities and Exchange Commission today announced settled charges against registered municipal advisor Fieldman Rolapp & Associates, Inc. (“FRA”) and one of its principals, Anna Sarabian, concerning a breach of its duty of care.  

The SEC’s order finds that between October 2018 and July 2019, FRA and Sarabian made a series of presentations to a California city (the “City”) regarding cost analyses of funding options for a community project.  The presentations contained comparisons of several alternatives for funding the project, including funding it entirely with available cash, entirely with new debt with various maturity dates, and several hybrid options consisting of both cash and new debt with various maturity dates.  According to the order, FRA’s model for calculating the net present value costs of the different financing options contained flawed assumptions that made it appear the 100% debt option with the longest maturity was the least expensive option for financing when, in fact, other options would have been less expensive on a net present value basis.  The City ultimately decided to finance the project entirely with new debt.  

The SEC’s order finds that FRA and Sarabian willfully violated Section 15B(c)(1) of the Securities Exchange Act of 1934, and Rules G-17 and G-42(a)(ii) of the Municipal Securities Rulemaking Board.  Without admitting or denying the findings in the order, FRA and Sarabian agreed to settle the charges and cease-and-desist from future violations of those provisions.  FRA agreed to pay a civil penalty of $60,000, disgorgement of $56,548.50, and prejudgment interest of $11,368.77, and Sarabian agreed to pay a civil penalty of $30,000.

The SEC’s investigation was conducted by Brian P. Knight, Creighton Papier, and Joseph Chimienti and supervised by David Zhou and Rebecca Olsen, all of the Enforcement Division’s Public Finance Abuse Unit.