In re KAUFMAN

UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 101043 / September 17, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22123 
 
 
 
In the Matter of 
 
KAUFMAN, HALL & ASSOCIATES, LLC 
AND PONDER & COMPANY,  
 
Respondents. 
 
ORDER INSTITUTING 
ADMINISTRATIVE AND CEASE-
AND-DESIST PROCEEDINGS 
PURSUANT TO SECTIONS 15B AND 
21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A 
CEASE-AND-DESIST ORDER  
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in 
the public interest that public administrative and cease-and-desist proceedings be, and hereby 
are, instituted pursuant to Sections 15B and 21C of the Securities Exchange Act of 1934 
(“Exchange Act”) against Kaufman, Hall & Associates, LLC (“Kaufman Hall”) and Ponder & 
Company (“Ponder”), (collectively, “Respondents”). 
 
II. 
 
 In anticipation of the institution of these proceedings, Respondents have submitted an 
Offer of Settlement (“Offer”) which the Commission has determined to accept.  Respondents 
admit the facts set forth in Section III below, acknowledge that their conduct violated the federal 
securities laws, admit the Commission’s jurisdiction over them and the subject matter of these 
proceedings, and consent to the entry of this Order Instituting Administrative and Cease-and-
Desist Proceedings Pursuant to Sections 15B and 21C of the Securities Exchange Act of 1934, 
Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as 
set forth below. 
 
  

 2 
III. 
 
 On the basis of this Order and Respondents’ Offer, the Commission finds
1
 that: 
 
Summary 
 
1. The federal securities laws impose recordkeeping requirements on municipal 
advisors, which are intended to facilitate the Commission’s inspections and examinations of 
municipal advisors and assist the Commission in evaluating a municipal advisor’s compliance with 
the applicable federal securities laws, including the rules of the Municipal Securities Rulemaking 
Board (“MSRB”).  These recordkeeping requirements require, among other things, that municipal 
advisors maintain and preserve all written communications relating to municipal advisory activities 
for at least five years.  
 
2. These proceedings arise out of the failure of certain Kaufman Hall and Ponder 
employees, including at senior levels, to adhere to these recordkeeping requirements and 
Respondents’ own policies.  Using unapproved electronic communication methods, these 
employees communicated with regard to municipal advisory activities both internally and externally 
by text messages (“off-channel communications”).    
 
3. From at least July 2020 to December 2023 (the “relevant period”), multiple 
employees of Kaufman Hall and Ponder sent and received off-channel communications relating to 
municipal advisory activities.  Kaufman Hall and Ponder did not maintain or preserve certain of 
these written communications.  Kaufman Hall’s and Ponder’s failures involved employees at 
various levels of authority, including both municipal advisor representatives and municipal advisor 
principals.
2
  As a result, Kaufman Hall and Ponder violated Section 17(a) of the Exchange Act and 
Rule 15Ba1-8 thereunder, and MSRB Rules G-8 and G-9.   
 
4. Some of Kaufman Hall’s and Ponder’s supervisors, who were responsible for 
preventing this misconduct, themselves failed to comply with these recordkeeping requirements, as 
well as the Respondents’ own policies, by sending and receiving off-channel communications 
relating to municipal advisory activities.  Kaufman Hall and Ponder failed to implement and 
maintain a system to supervise the municipal advisory activities of the municipal advisor and its 
associated persons that is reasonably designed to achieve compliance with applicable recordkeeping 
requirements.  As a result, Kaufman Hall and Ponder violated MSRB Rule G-44.  By violating 
MSRB Rules G-8, G-9 and G-44, Kaufman Hall and Ponder violated Section 15B(c)(1) of the 
Exchange Act.    
                                           
1
 The findings herein are made pursuant to Respondents’ Offer of Settlement and are not binding on 
any other person or entity in this or any other proceeding. 
 
2
  MSRB Rule G-3(d)(i)(A) defines a “municipal advisor representative” to mean “a natural person associated 
with a municipal advisor who engages in municipal advisory activities on the municipal advisor’s behalf, other than 
a person performing only clerical, administrative, support or similar functions.”  MSRB Rule G-3(e)(i) defines a 
“municipal advisor principal” to mean “a natural person associated with a municipal advisor who is directly engaged 
in the management, direction or supervision of the municipal advisory activities of the municipal advisor and its 
associated persons.” 
 

 3 
 
Respondents 
 
 5. Kaufman, Hall & Associates, LLC is a limited liability company headquartered in 
Chicago, Illinois.  Kaufman Hall has been registered with the Commission and the MSRB as a 
municipal advisor since December 2014 and was registered during the relevant time period. On 
May 1, 2023, Kaufman Hall acquired Ponder.
 
3
    
 
 6. Ponder & Company is a corporation formerly headquartered in Brentwood, 
Tennessee.  Ponder was registered with the Commission and the MSRB as a municipal advisor 
from November 2014 until January 2024 and was registered during the relevant time period. On 
May 1, 2023, Kaufman Hall acquired Ponder.  On November 11, 2023, Ponder filed a Form MA-
W with the Commission withdrawing its municipal advisor registration. 
 
                         Recordkeeping Requirements for Municipal Advisors 
 
 7. Section 17(a)(1) of the Exchange Act requires municipal advisors to make and 
keep for prescribed periods such records, furnish such copies thereof, and make and disseminate 
such reports as the Commission, by rule, prescribes as necessary or appropriate in the public 
interest, for the protection of investors, or otherwise in furtherance of the Exchange Act.  
Exchange Act Rule 15Ba1-8 requires that municipal advisors make and keep true, accurate, and 
current originals or copies of all written communications received, and originals or copies of all 
written communications sent, by such municipal advisor relating to municipal advisory activities, 
regardless of the format of such communications, and for such records to be maintained and 
preserved for a period of not less than five years, the first two years in easily accessible places.   
 
 8. MSRB Rule G-8(h)(i) requires municipal advisors to make and keep current all 
books and records described in Exchange Act Rule 15Ba1-8(a)(1)-(8), which includes all written 
communications relating to municipal advisory activities.  MSRB Rule G-9(h)(i) requires the 
municipal advisor to preserve these records for a period of not less than five years.   
 
 9. Section 15B(c)(1) of the Exchange Act prohibits municipal advisors from 
engaging in any act, practice, or course of business that is in contravention of any rule of the 
MSRB. 
 
Policies and Procedures 
 
 10. During the relevant period, Kaufman Hall and Ponder each maintained certain 
policies and procedures designed to ensure the maintenance and retention of municipal advisory-
related records, including electronic communications, in compliance with the relevant 
recordkeeping provisions.   
 
                                           
3
 After the acquisition, Ponder’s associated persons became associated persons of Kaufman Hall, and Kaufman Hall 
assumed all Ponder’s advisory contracts and took possession of all Ponder’s books and records. 

 4 
 11. Kaufman Hall’s and Ponder’s employees were advised that the use of unapproved 
electronic communications methods was not permitted, and that they should limit messaging 
relating to municipal advisory activities to firm email accounts.   
 
 12. For each Respondent, messages sent through firm-approved communications 
methods were monitored, subject to review, and, when appropriate, archived.  Certain messages 
sent through unapproved communications methods were not monitored, subject to review or 
archived. 
  
 13. Both Respondents asked all employees, including supervisors, to acknowledge in 
writing, for Kaufman on a quarterly basis and Ponder on an annual basis, that they had read, 
understood, and complied with their respective firm’s policies and procedures, including the 
electronic communications policies.  Neither Kaufman Hall nor Ponder had processes in place to 
review, test or modify its reliance on employees’ written acknowledgments. 
 
 14.  All of the Kaufman Hall and Ponder employees that sent or received off-channel 
communications, including supervisors, acknowledged in writing that they had read, understood 
and complied with their respective firm’s policies and procedures, including the electronic 
communications policies yet did not follow these policies.  Kaufman Hall’s and Ponder’s 
reliance on employees’ written acknowledgements was not reasonably designed to achieve 
compliance with recordkeeping requirements because it was not reliable absent appropriate 
follow-up measures.  Accordingly, Kaufman Hall’s and Ponder’s supervisory systems were not 
reasonably designed to achieve compliance with recordkeeping requirements. 
 
Recordkeeping Failures 
 
 15. In July 2023, the Commission staff commenced a risk-based initiative to 
investigate whether municipal advisors were properly retaining messages related to municipal 
advisory activities that were sent and/or received by employees using unapproved electronic 
communication methods.  Kaufman Hall, on its own behalf and on behalf of Ponder, cooperated 
with the investigation by voluntarily interviewing employees and reviewing messages found on 
employees’ electronic devices.   
 
 16. The Commission staff’s investigation uncovered off-channel communications at 
all seniority levels of Kaufman Hall and Ponder.  The investigation determined that, during the 
relevant period, multiple Kaufman Hall and Ponder personnel had engaged in off-channel 
communications relating to municipal advisory activities that involved both other employees of 
Kaufman Hall and Ponder, respectively and external contacts that were not preserved. 
 
 17.   For example, a Ponder firm principal exchanged text messages with a municipal 
issuer client relating to the client’s credit rating and outlook.  In another example, a Kaufman 
Hall representative exchanged text messages with a municipal issuer client relating to the 
decision to issue taxable versus tax-exempt bonds.  
 
  

 5 
Violations 
   
18. As a result of the conduct described above, during the relevant period, Kaufman 
Hall and Ponder willfully
4
 violated Section 17(a) of the Exchange Act and Rule 15Ba1-8 
thereunder and MSRB Rules G-8 and G-9, which require municipal advisors to make and 
preserve for at least five years originals or copies of all written communications received or sent 
relating to municipal advisory activities.   
 
19.  As a result of the conduct described above, during the relevant period, Kaufman 
Hall and Ponder willfully violated MSRB Rule G-44, which requires municipal advisors to, 
among other things, implement, and maintain a system to supervise the municipal advisory 
activities of the municipal advisor and its associated persons that is reasonably designed to 
achieve compliance with applicable securities laws and regulations, including applicable MSRB 
rules.   
 
20. As a result of Kaufman Hall’s and Ponder’s willful violations of MSRB Rules G-
8, G-9 and G-44, Kaufman Hall and Ponder willfully violated Section 15B(c)(1) of the Exchange 
Act, which prohibits municipal advisors from making use of the mails or any means or 
instrumentality of interstate commerce 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.   
 
Remedial Efforts 
 
 21. In determining to accept the Offer, the Commission considered remedial steps 
promptly undertaken by Kaufman Hall and the cooperation afforded the Commission staff.  Prior 
to this action, Kaufman Hall modified its policies and procedures, and increased training 
concerning the use of approved communications methods and began implementing significant 
                                           
 
4
  “Willfully,” for purposes of imposing relief under Section 15B of the Exchange Act, “‘means no more than 
that the person charged with the duty knows what he is doing.’”  Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 
2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).  There is no requirement that the actor “also be 
aware that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  The decision in 
The Robare Group, Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured 
statutory provision, does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting forth the showing 
required to establish that a person has “willfully omit[ted]” material information from a required disclosure in 
violation of Section 207 of the Advisers Act). 
 

 6 
changes to the technology available to employees.  The former Ponder employees are now subject 
to Kaufman Hall’s revised policies and procedures, training, and technology.  
 
Undertakings 
 
 22. In addition, Kaufman Hall has undertaken to: 
 
a. Within 180 days of the entry of this Order: (i) establish reasonably designed 
written policies and procedures regarding the preservation of electronic communications;  
(ii) conduct a training of all associated persons who engage in municipal advisory 
activities regarding the preservation of electronic communications, to be provided by a 
person or entity with relevant expertise in the preservation of electronic communications 
and recordkeeping requirements under the Exchange Act, the rules and regulations 
thereunder, and under MSRB Rules; and (iii) establish a program of periodic training of all 
associated persons who engage in municipal advisory activities regarding the preservation 
of electronic communications.  The written policies and procedures should include the 
designation of a municipal advisor principal at Kaufman Hall responsible for ensuring 
compliance by Kaufman Hall with such policies and procedures and responsible for 
implementing and maintaining a record (including attendance) of the initial training and the 
periodic training program.  
 
b. Certify, in writing, compliance with the undertakings set forth above.  The 
certification shall: (i) identify the undertakings; (ii) provide written evidence of compliance 
with the undertakings in the form of a narrative; and (iii) be supported by exhibits sufficient 
to demonstrate compliance with the undertakings.  The Commission staff may make 
reasonable requests for further evidence of compliance with the undertakings, and 
Kaufman Hall agrees to provide such evidence at the time and in the manner specified by 
Commission staff or advise the Commission staff of any request for further evidence that 
Kaufman Hall considers unreasonable.  The certification, written evidence of compliance 
and supporting exhibits shall be submitted to LeeAnn Ghazil Gaunt, Chief, Public Finance 
Abuse Unit, Securities and Exchange Commission, 33 Arch Street, 24
th
 Floor, Boston, MA 
02110, with a copy to the Office of Chief Counsel of the Enforcement Division, no later 
than the one-year anniversary of the date of this order.  
 
c.  Deadlines.  For good cause shown, the Commission staff may extend any of the 
procedural dates relating to the undertakings.  Deadlines for procedural dates shall be 
counted in calendar days, except that if the last day falls on a weekend or federal holiday, 
the next business day shall be considered to be the last day. 
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 
impose the sanctions agreed to in Respondents’ Offer. 
 
 Accordingly, pursuant to Sections 15B and 21C of the Exchange Act, it is hereby 
ORDERED that: 
 

 7 
  A. Respondent Kaufman Hall cease and desist from committing or causing any 
violations and any future violations of Section 17(a) of the Exchange Act and Rule 15Ba1-8 
thereunder and Section 15B(c)(1) of the Exchange Act and MSRB Rules G-8, G-9 and G-44.   
 
 B. Respondent Kaufman Hall is censured. 
  
 C. Respondent Kaufman Hall shall comply with the undertaking enumerated in 
paragraph 22. 
 
D. Respondent Kaufman Hall shall, within 10 days of the entry of this Order, pay a 
civil money penalty in the amount of $324,000 to the Securities and Exchange Commission, of 
which $81,000 shall be transferred to the Municipal Securities Rulemaking Board in accordance 
with Section 15B(c)(9)(A) of the Exchange Act, and of which the remaining $243,000 shall be 
transferred to the general fund of the United States Treasury, subject to Exchange Act Section 
21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 
§3717.  Payment must be made in one of the following ways: 
 
(1) Respondent Kaufman Hall may transmit payment electronically to the 
Commission, which will provide detailed ACH transfer/Fedwire 
instructions upon request;  
 
(2) Respondent Kaufman Hall may make direct payment from a bank account 
via Pay.gov through the SEC website at 
http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent Kaufman Hall may pay by certified check, bank cashier’s 
check, or United States postal money order, made payable to the Securities 
and Exchange Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
 Payments by check or money order must be accompanied by a cover letter identifying 
Kaufman, Hall & Associates, LLC and Ponder and Company as the Respondents in these 
proceedings, and the file number of these proceedings; a copy of the cover letter and check or 
money order must be sent to LeeAnn Ghazil Gaunt, Chief, Public Finance Abuse Unit, Securities 
and Exchange Commission, Boston Regional Office, 33 Arch Street, 24th Floor, Boston, MA 
02110. 
 
E. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondent Kaufman Hall agrees that in any 
Related Investor Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or 
reduction of any award of compensatory damages by the amount of any part of Respondent 

 8 
Kaufman Hall’s payment of a civil penalty in this action (“Penalty Offset”).  If the court in any 
Related Investor Action grants such a Penalty Offset, Respondent Kaufman Hall agrees that it 
shall, within 30 days after entry of a final order granting the Penalty Offset, notify the 
Commission’s counsel in this action and pay the amount of the Penalty Offset to the Securities 
and Exchange Commission.  Such a payment shall not be deemed an additional civil penalty and 
shall not be deemed to change the amount of the civil penalty imposed in this proceeding.  For 
purposes of this paragraph, a “Related Investor Action” means a private damages action brought 
against Respondent Kaufman Hall by or on behalf of one or more investors based on 
substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 By the Commission. 
 
 
 
       Vanessa A. Countryman  
       Secretary  

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 
 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 101043 / September 17, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22123 
 

 

 

In the Matter of 
 

KAUFMAN, HALL & ASSOCIATES, LLC 

AND PONDER & COMPANY,  
 

Respondents. 
 

ORDER INSTITUTING 

ADMINISTRATIVE AND CEASE-

AND-DESIST PROCEEDINGS 

PURSUANT TO SECTIONS 15B AND 

21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS AND A 

CEASE-AND-DESIST ORDER  

 

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in 

the public interest that public administrative and cease-and-desist proceedings be, and hereby 

are, instituted pursuant to Sections 15B and 21C of the Securities Exchange Act of 1934 

(“Exchange Act”) against Kaufman, Hall & Associates, LLC (“Kaufman Hall”) and Ponder & 

Company (“Ponder”), (collectively, “Respondents”). 

 

II. 

 

 In anticipation of the institution of these proceedings, Respondents have submitted an 

Offer of Settlement (“Offer”) which the Commission has determined to accept.  Respondents 

admit the facts set forth in Section III below, acknowledge that their conduct violated the federal 

securities laws, admit the Commission’s jurisdiction over them and the subject matter of these 

proceedings, and consent to the entry of this Order Instituting Administrative and Cease-and-

Desist Proceedings Pursuant to Sections 15B and 21C of the Securities Exchange Act of 1934, 

Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as 

set forth below. 

 

  



 2 

III. 

 

 On the basis of this Order and Respondents’ Offer, the Commission finds1 that: 

 

Summary 

 

1. The federal securities laws impose recordkeeping requirements on municipal 

advisors, which are intended to facilitate the Commission’s inspections and examinations of 

municipal advisors and assist the Commission in evaluating a municipal advisor’s compliance with 

the applicable federal securities laws, including the rules of the Municipal Securities Rulemaking 

Board (“MSRB”).  These recordkeeping requirements require, among other things, that municipal 

advisors maintain and preserve all written communications relating to municipal advisory activities 

for at least five years.  

 

2. These proceedings arise out of the failure of certain Kaufman Hall and Ponder 

employees, including at senior levels, to adhere to these recordkeeping requirements and 

Respondents’ own policies.  Using unapproved electronic communication methods, these 

employees communicated with regard to municipal advisory activities both internally and externally 

by text messages (“off-channel communications”).    

 

3. From at least July 2020 to December 2023 (the “relevant period”), multiple 

employees of Kaufman Hall and Ponder sent and received off-channel communications relating to 

municipal advisory activities.  Kaufman Hall and Ponder did not maintain or preserve certain of 

these written communications.  Kaufman Hall’s and Ponder’s failures involved employees at 

various levels of authority, including both municipal advisor representatives and municipal advisor 

principals.2  As a result, Kaufman Hall and Ponder violated Section 17(a) of the Exchange Act and 

Rule 15Ba1-8 thereunder, and MSRB Rules G-8 and G-9.   

 

4. Some of Kaufman Hall’s and Ponder’s supervisors, who were responsible for 

preventing this misconduct, themselves failed to comply with these recordkeeping requirements, as 

well as the Respondents’ own policies, by sending and receiving off-channel communications 

relating to municipal advisory activities.  Kaufman Hall and Ponder failed to implement and 

maintain a system to supervise the municipal advisory activities of the municipal advisor and its 

associated persons that is reasonably designed to achieve compliance with applicable recordkeeping 

requirements.  As a result, Kaufman Hall and Ponder violated MSRB Rule G-44.  By violating 

MSRB Rules G-8, G-9 and G-44, Kaufman Hall and Ponder violated Section 15B(c)(1) of the 

Exchange Act.    

                                           
1 The findings herein are made pursuant to Respondents’ Offer of Settlement and are not binding on 

any other person or entity in this or any other proceeding. 

 
2  MSRB Rule G-3(d)(i)(A) defines a “municipal advisor representative” to mean “a natural person associated 

with a municipal advisor who engages in municipal advisory activities on the municipal advisor’s behalf, other than 

a person performing only clerical, administrative, support or similar functions.”  MSRB Rule G-3(e)(i) defines a 

“municipal advisor principal” to mean “a natural person associated with a municipal advisor who is directly engaged 

in the management, direction or supervision of the municipal advisory activities of the municipal advisor and its 

associated persons.” 

 



 3 

 

Respondents 

 

 5. Kaufman, Hall & Associates, LLC is a limited liability company headquartered in 

Chicago, Illinois.  Kaufman Hall has been registered with the Commission and the MSRB as a 

municipal advisor since December 2014 and was registered during the relevant time period. On 

May 1, 2023, Kaufman Hall acquired Ponder. 3    

 

 6. Ponder & Company is a corporation formerly headquartered in Brentwood, 

Tennessee.  Ponder was registered with the Commission and the MSRB as a municipal advisor 

from November 2014 until January 2024 and was registered during the relevant time period. On 

May 1, 2023, Kaufman Hall acquired Ponder.  On November 11, 2023, Ponder filed a Form MA-

W with the Commission withdrawing its municipal advisor registration. 

 

                         Recordkeeping Requirements for Municipal Advisors 

 

 7. Section 17(a)(1) of the Exchange Act requires municipal advisors to make and 

keep for prescribed periods such records, furnish such copies thereof, and make and disseminate 

such reports as the Commission, by rule, prescribes as necessary or appropriate in the public 

interest, for the protection of investors, or otherwise in furtherance of the Exchange Act.  

Exchange Act Rule 15Ba1-8 requires that municipal advisors make and keep true, accurate, and 

current originals or copies of all written communications received, and originals or copies of all 

written communications sent, by such municipal advisor relating to municipal advisory activities, 

regardless of the format of such communications, and for such records to be maintained and 

preserved for a period of not less than five years, the first two years in easily accessible places.   

 

 8. MSRB Rule G-8(h)(i) requires municipal advisors to make and keep current all 

books and records described in Exchange Act Rule 15Ba1-8(a)(1)-(8), which includes all written 

communications relating to municipal advisory activities.  MSRB Rule G-9(h)(i) requires the 

municipal advisor to preserve these records for a period of not less than five years.   

 

 9. Section 15B(c)(1) of the Exchange Act prohibits municipal advisors from 

engaging in any act, practice, or course of business that is in contravention of any rule of the 

MSRB. 

 

Policies and Procedures 

 

 10. During the relevant period, Kaufman Hall and Ponder each maintained certain 

policies and procedures designed to ensure the maintenance and retention of municipal advisory-

related records, including electronic communications, in compliance with the relevant 

recordkeeping provisions.   

 

                                           
3 After the acquisition, Ponder’s associated persons became associated persons of Kaufman Hall, and Kaufman Hall 

assumed all Ponder’s advisory contracts and took possession of all Ponder’s books and records. 



 4 

 11. Kaufman Hall’s and Ponder’s employees were advised that the use of unapproved 

electronic communications methods was not permitted, and that they should limit messaging 

relating to municipal advisory activities to firm email accounts.   

 

 12. For each Respondent, messages sent through firm-approved communications 

methods were monitored, subject to review, and, when appropriate, archived.  Certain messages 

sent through unapproved communications methods were not monitored, subject to review or 

archived. 

  

 13. Both Respondents asked all employees, including supervisors, to acknowledge in 

writing, for Kaufman on a quarterly basis and Ponder on an annual basis, that they had read, 

understood, and complied with their respective firm’s policies and procedures, including the 

electronic communications policies.  Neither Kaufman Hall nor Ponder had processes in place to 

review, test or modify its reliance on employees’ written acknowledgments. 

 

 14.  All of the Kaufman Hall and Ponder employees that sent or received off-channel 

communications, including supervisors, acknowledged in writing that they had read, understood 

and complied with their respective firm’s policies and procedures, including the electronic 

communications policies yet did not follow these policies.  Kaufman Hall’s and Ponder’s 

reliance on employees’ written acknowledgements was not reasonably designed to achieve 

compliance with recordkeeping requirements because it was not reliable absent appropriate 

follow-up measures.  Accordingly, Kaufman Hall’s and Ponder’s supervisory systems were not 

reasonably designed to achieve compliance with recordkeeping requirements. 

 

Recordkeeping Failures 

 

 15. In July 2023, the Commission staff commenced a risk-based initiative to 

investigate whether municipal advisors were properly retaining messages related to municipal 

advisory activities that were sent and/or received by employees using unapproved electronic 

communication methods.  Kaufman Hall, on its own behalf and on behalf of Ponder, cooperated 

with the investigation by voluntarily interviewing employees and reviewing messages found on 

employees’ electronic devices.   

 

 16. The Commission staff’s investigation uncovered off-channel communications at 

all seniority levels of Kaufman Hall and Ponder.  The investigation determined that, during the 

relevant period, multiple Kaufman Hall and Ponder personnel had engaged in off-channel 

communications relating to municipal advisory activities that involved both other employees of 

Kaufman Hall and Ponder, respectively and external contacts that were not preserved. 

 

 17.   For example, a Ponder firm principal exchanged text messages with a municipal 

issuer client relating to the client’s credit rating and outlook.  In another example, a Kaufman 

Hall representative exchanged text messages with a municipal issuer client relating to the 

decision to issue taxable versus tax-exempt bonds.  

 

  



 5 

Violations 

   

18. As a result of the conduct described above, during the relevant period, Kaufman 

Hall and Ponder willfully4 violated Section 17(a) of the Exchange Act and Rule 15Ba1-8 

thereunder and MSRB Rules G-8 and G-9, which require municipal advisors to make and 

preserve for at least five years originals or copies of all written communications received or sent 

relating to municipal advisory activities.   

 

19.  As a result of the conduct described above, during the relevant period, Kaufman 

Hall and Ponder willfully violated MSRB Rule G-44, which requires municipal advisors to, 

among other things, implement, and maintain a system to supervise the municipal advisory 

activities of the municipal advisor and its associated persons that is reasonably designed to 

achieve compliance with applicable securities laws and regulations, including applicable MSRB 

rules.   

 

20. As a result of Kaufman Hall’s and Ponder’s willful violations of MSRB Rules G-

8, G-9 and G-44, Kaufman Hall and Ponder willfully violated Section 15B(c)(1) of the Exchange 

Act, which prohibits municipal advisors from making use of the mails or any means or 

instrumentality of interstate commerce 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.   

 

Remedial Efforts 

 

 21. In determining to accept the Offer, the Commission considered remedial steps 

promptly undertaken by Kaufman Hall and the cooperation afforded the Commission staff.  Prior 

to this action, Kaufman Hall modified its policies and procedures, and increased training 

concerning the use of approved communications methods and began implementing significant 

                                           
 
4  “Willfully,” for purposes of imposing relief under Section 15B of the Exchange Act, “‘means no more than 

that the person charged with the duty knows what he is doing.’”  Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 

2000) (quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)).  There is no requirement that the actor “also be 

aware that he is violating one of the Rules or Acts.”  Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965).  The decision in 

The Robare Group, Ltd. v. SEC, which construed the term “willfully” for purposes of a differently structured 

statutory provision, does not alter that standard.  922 F.3d 468, 478-79 (D.C. Cir. 2019) (setting forth the showing 

required to establish that a person has “willfully omit[ted]” material information from a required disclosure in 

violation of Section 207 of the Advisers Act). 

 



 6 

changes to the technology available to employees.  The former Ponder employees are now subject 

to Kaufman Hall’s revised policies and procedures, training, and technology.  

 

Undertakings 

 

 22. In addition, Kaufman Hall has undertaken to: 

 

a. Within 180 days of the entry of this Order: (i) establish reasonably designed 

written policies and procedures regarding the preservation of electronic communications;  

(ii) conduct a training of all associated persons who engage in municipal advisory 

activities regarding the preservation of electronic communications, to be provided by a 

person or entity with relevant expertise in the preservation of electronic communications 

and recordkeeping requirements under the Exchange Act, the rules and regulations 

thereunder, and under MSRB Rules; and (iii) establish a program of periodic training of all 

associated persons who engage in municipal advisory activities regarding the preservation 

of electronic communications.  The written policies and procedures should include the 

designation of a municipal advisor principal at Kaufman Hall responsible for ensuring 

compliance by Kaufman Hall with such policies and procedures and responsible for 

implementing and maintaining a record (including attendance) of the initial training and the 

periodic training program.  

 

b. Certify, in writing, compliance with the undertakings set forth above.  The 

certification shall: (i) identify the undertakings; (ii) provide written evidence of compliance 

with the undertakings in the form of a narrative; and (iii) be supported by exhibits sufficient 

to demonstrate compliance with the undertakings.  The Commission staff may make 

reasonable requests for further evidence of compliance with the undertakings, and 

Kaufman Hall agrees to provide such evidence at the time and in the manner specified by 

Commission staff or advise the Commission staff of any request for further evidence that 

Kaufman Hall considers unreasonable.  The certification, written evidence of compliance 

and supporting exhibits shall be submitted to LeeAnn Ghazil Gaunt, Chief, Public Finance 

Abuse Unit, Securities and Exchange Commission, 33 Arch Street, 24th Floor, Boston, MA 

02110, with a copy to the Office of Chief Counsel of the Enforcement Division, no later 

than the one-year anniversary of the date of this order.  

 

c.  Deadlines.  For good cause shown, the Commission staff may extend any of the 

procedural dates relating to the undertakings.  Deadlines for procedural dates shall be 

counted in calendar days, except that if the last day falls on a weekend or federal holiday, 

the next business day shall be considered to be the last day. 

 

IV. 
 

 In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanctions agreed to in Respondents’ Offer. 

 

 Accordingly, pursuant to Sections 15B and 21C of the Exchange Act, it is hereby 

ORDERED that: 
 



 7 

  A. Respondent Kaufman Hall cease and desist from committing or causing any 

violations and any future violations of Section 17(a) of the Exchange Act and Rule 15Ba1-8 

thereunder and Section 15B(c)(1) of the Exchange Act and MSRB Rules G-8, G-9 and G-44.   
 

 B. Respondent Kaufman Hall is censured. 

  

 C. Respondent Kaufman Hall shall comply with the undertaking enumerated in 

paragraph 22. 
 

D. Respondent Kaufman Hall shall, within 10 days of the entry of this Order, pay a 

civil money penalty in the amount of $324,000 to the Securities and Exchange Commission, of 

which $81,000 shall be transferred to the Municipal Securities Rulemaking Board in accordance 

with Section 15B(c)(9)(A) of the Exchange Act, and of which the remaining $243,000 shall be 

transferred to the general fund of the United States Treasury, subject to Exchange Act Section 

21F(g)(3).  If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 

§3717.  Payment must be made in one of the following ways: 

 

(1) Respondent Kaufman Hall may transmit payment electronically to the 

Commission, which will provide detailed ACH transfer/Fedwire 

instructions upon request;  

 

(2) Respondent Kaufman Hall may make direct payment from a bank account 

via Pay.gov through the SEC website at 

http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent Kaufman Hall may pay by certified check, bank cashier’s 

check, or United States postal money order, made payable to the Securities 

and Exchange Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

 Payments by check or money order must be accompanied by a cover letter identifying 

Kaufman, Hall & Associates, LLC and Ponder and Company as the Respondents in these 

proceedings, and the file number of these proceedings; a copy of the cover letter and check or 

money order must be sent to LeeAnn Ghazil Gaunt, Chief, Public Finance Abuse Unit, Securities 

and Exchange Commission, Boston Regional Office, 33 Arch Street, 24th Floor, Boston, MA 

02110. 
 

E. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 

be treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondent Kaufman Hall agrees that in any 

Related Investor Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or 

reduction of any award of compensatory damages by the amount of any part of Respondent 

http://www.sec.gov/about/offices/ofm.htm


 8 

Kaufman Hall’s payment of a civil penalty in this action (“Penalty Offset”).  If the court in any 

Related Investor Action grants such a Penalty Offset, Respondent Kaufman Hall agrees that it 

shall, within 30 days after entry of a final order granting the Penalty Offset, notify the 

Commission’s counsel in this action and pay the amount of the Penalty Offset to the Securities 

and Exchange Commission.  Such a payment shall not be deemed an additional civil penalty and 

shall not be deemed to change the amount of the civil penalty imposed in this proceeding.  For 

purposes of this paragraph, a “Related Investor Action” means a private damages action brought 

against Respondent Kaufman Hall by or on behalf of one or more investors based on 

substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 By the Commission. 

 

 

 

       Vanessa A. Countryman  

       Secretary  


	21. In determining to accept the Offer, the Commission considered remedial steps promptly undertaken by Kaufman Hall and the cooperation afforded the Commission staff.  Prior to this action, Kaufman Hall modified its policies and procedures, and incr...
	Undertakings
	22. In addition, Kaufman Hall has undertaken to:
	a. Within 180 days of the entry of this Order: (i) establish reasonably designed written policies and procedures regarding the preservation of electronic communications;  (ii) conduct a training of all associated persons who engage in municipal adviso...
	b. Certify, in writing, compliance with the undertakings set forth above.  The certification shall: (i) identify the undertakings; (ii) provide written evidence of compliance with the undertakings in the form of a narrative; and (iii) be supported by ...
	c.  Deadlines.  For good cause shown, the Commission staff may extend any of the procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in calendar days, except that if the last day falls on a weekend or federa...
	IV.