In re PUBLIC RESOURCES ADVISORY

UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 101046 / September 17, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22126 
 
 
 
In the Matter of 
 
PUBLIC RESOURCES ADVISORY  
GROUP, INC.,  
 
Respondent. 
 
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 Public Resources Advisory Group, Inc. (“Public Resources Advisory” or 
“Respondent”).  
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer of 
Settlement (“Offer”) which the Commission has determined to accept.  Respondent admits the 
facts set forth in Section III below, acknowledges that its conduct violated the federal securities 
laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 
consents 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. 
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
                                           
1
 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding. 

 2 
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 Public Resources Advisory employees 
throughout the firm, including at senior levels, to adhere to these recordkeeping requirements and the 
firm’s 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 September 2023 (the “relevant period”), multiple Public 
Resources Advisory employees sent and received off-channel communications relating to municipal 
advisory activities.  Public Resources Advisory did not maintain or preserve these written 
communications.  Public Resources Advisory’s failure involved employees at various levels of authority, 
including both municipal advisor representatives and municipal advisor principals.
2
  As a result, Public 
Resources Advisory violated Section 17(a) of the Exchange Act and Rule 15Ba1-8 thereunder, and 
MSRB Rules G-8 and G-9.   
 
4. Some of Public Resources Advisory’s supervisors, who were responsible for preventing 
this misconduct, themselves failed to comply with these recordkeeping requirements, as well as the 
firm’s own policies by sending and receiving off-channel communications relating to municipal advisory 
activities.  Since at least July 2020, Public Resources Advisory 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, Public Resources Advisory violated MSRB Rule G-44.  By violating MSRB Rules G-8, G-9 and 
G-44, Public Resources Advisory violated Section 15B(c)(1) of the Exchange Act.    
 
Respondent 
 
 5. Public Resources Advisory Group, Inc. (“Public Resources Advisory”) is a New 
York corporation with its principal office and place of business in New York, New York.  Public 
                                           
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 
Resources Advisory has been registered with the Commission and the MSRB as a municipal 
advisor since July 2014 and was registered during the relevant time period. 
 
                         Recordkeeping Requirements for Municipal Advisors 
 
 6. 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.   
 
 7. 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.   
 
 8. 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 
 
 9. During the relevant period, Public Resources Advisory 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.   
 
 10. Public Resources Advisory’s employees were advised that the use of unapproved 
electronic communications methods to conduct Public Resources Advisory-related business was 
generally not permitted unless such messages were retained in accordance with Public Resources 
Advisory’s document retention policies.   
 
 11. Messages sent through firm-approved communications methods were monitored, 
subject to review and archived.  Messages sent through unapproved communications methods 
were not monitored, subject to review or archived. 
 
 12. Public Resources Advisory had procedures for all employees, including 
supervisors, requiring their written acknowledgment that they had read and understood Public 
Resources Advisory’s electronic communications policies and were responsible for abiding by their 
provisions.  In addition, Public Resources Advisory conducted training and provided reminders to 
employees regarding the requirements of its electronic communication policies.  However, Public 

 4 
Resources Advisory did not have processes in place to review, test or modify its reliance on 
employees’ written acknowledgments. 
 
 13.  All of Public Resources Advisory’s employees that sent or received off-channel 
communications, including supervisors, acknowledged in writing that they understood the 
electronic communications policies and were responsible for abiding with them, yet did not follow 
these policies.  Public Resources Advisory’s reliance on employees’ acknowledgment was not 
reasonably designed to achieve compliance with the recordkeeping requirements because it was 
not reliable absent appropriate follow-up measures.  Accordingly, Public Resources Advisory’s 
supervisory system was not reasonably designed to achieve compliance with recordkeeping 
requirements. 
 
Recordkeeping Failures 
 
 14. 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.  Public Resources Advisory cooperated with the investigation by voluntarily gathering, 
reviewing and producing messages found on employees’ electronic devices.   
 
 15. The Commission staff’s investigation uncovered off-channel communications at all 
seniority levels of Public Resources Advisory.  The investigation determined that, during the 
relevant period, multiple Public Resources Advisory personnel had engaged in off-channel 
communications relating to municipal advisory activities involving both other employees of Public 
Resources Advisory and external contacts that were not preserved.    
 
 16.  For example, a municipal advisor representative of Public Resources Advisory 
exchanged text messages with a municipal issuer client addressing credit ratings for an anticipated 
municipal bond issuance. The text exchange also communicated information about a different 
series of bonds, expected to be issued at the same time as the first series. The communication 
about the second series of bonds described a lender’s response to the municipal issuer client’s 
request for the deletion of an event of default in financing documents and the municipal advisor 
representative’s response to the lender. For another example, a municipal advisor principal of 
Public Resources Advisory texted a municipal issuer client describing improvement in municipal-
securities market conditions, a request from a placement agent to execute a Bond Purchase 
Agreement and indicating approval that the client should proceed. 
.   
 

 5 
Violations 
   
17. As a result of the conduct described above, during the relevant period, Public 
Resources Advisory willfully
3
 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.   
 
18.  As a result of the conduct described above, during the relevant period, Public 
Resources Advisory 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.   
 
19. As a result of Public Resources Advisory’s willful violations of MSRB Rules G-8, 
G-9 and G-44, Public Resources Advisory 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 
 
 20. In determining to accept the Offer, the Commission considered remedial steps 
undertaken by Public Resources Advisory and the cooperation afforded the Commission staff.  Prior to 
this action, Public Resources Advisory conducted additional training and enhanced its policies and 
procedures concerning the use of approved communications methods, including by requiring quarterly 
attestations.   
 
Undertakings 
 
 21. In addition, Public Resources Advisory has undertaken to: 
 
                                           
3
  “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 
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 Respondent responsible for ensuring 
compliance by Respondent 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 
Respondent 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 
Respondent 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 Respondent Public Resources Advisory’s Offer. 
 
 Accordingly, pursuant to Sections 15B and 21C of the Exchange Act, it is hereby 
ORDERED that: 
 
  A. Respondent Public Resources Advisory 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 Public Resources Advisory is censured. 

 7 
 
 C. Respondent Public Resources Advisory shall comply with the undertakings 
enumerated in paragraph 21. 
 
D. Respondent Public Resources Advisory shall, within 10 days of the entry of this 
Order, pay a civil money penalty in the amount of $184,000.00 to the Securities and Exchange 
Commission, of which $46,000.00 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 
$138,000.00 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 may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent 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 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 
Public Resources Advisory as the Respondent 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 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’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 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 

 8 
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”  

 9 
means a private damages action brought against Respondent 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. 101046 / September 17, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22126 
 

 

 

In the Matter of 
 

PUBLIC RESOURCES ADVISORY  

GROUP, INC.,  
 

Respondent. 

 

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 Public Resources Advisory Group, Inc. (“Public Resources Advisory” or 

“Respondent”).  

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer of 

Settlement (“Offer”) which the Commission has determined to accept.  Respondent admits the 

facts set forth in Section III below, acknowledges that its conduct violated the federal securities 

laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 

consents 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. 

 

III. 

 

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

 

                                           
1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 

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



 2 

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 Public Resources Advisory employees 

throughout the firm, including at senior levels, to adhere to these recordkeeping requirements and the 

firm’s 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 September 2023 (the “relevant period”), multiple Public 

Resources Advisory employees sent and received off-channel communications relating to municipal 

advisory activities.  Public Resources Advisory did not maintain or preserve these written 

communications.  Public Resources Advisory’s failure involved employees at various levels of authority, 

including both municipal advisor representatives and municipal advisor principals.2  As a result, Public 

Resources Advisory violated Section 17(a) of the Exchange Act and Rule 15Ba1-8 thereunder, and 

MSRB Rules G-8 and G-9.   

 

4. Some of Public Resources Advisory’s supervisors, who were responsible for preventing 

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

firm’s own policies by sending and receiving off-channel communications relating to municipal advisory 

activities.  Since at least July 2020, Public Resources Advisory 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, Public Resources Advisory violated MSRB Rule G-44.  By violating MSRB Rules G-8, G-9 and 

G-44, Public Resources Advisory violated Section 15B(c)(1) of the Exchange Act.    

 

Respondent 

 

 5. Public Resources Advisory Group, Inc. (“Public Resources Advisory”) is a New 

York corporation with its principal office and place of business in New York, New York.  Public 

                                           
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 

Resources Advisory has been registered with the Commission and the MSRB as a municipal 

advisor since July 2014 and was registered during the relevant time period. 

 

                         Recordkeeping Requirements for Municipal Advisors 

 

 6. 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.   

 

 7. 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.   

 

 8. 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 

 

 9. During the relevant period, Public Resources Advisory 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.   

 

 10. Public Resources Advisory’s employees were advised that the use of unapproved 

electronic communications methods to conduct Public Resources Advisory-related business was 

generally not permitted unless such messages were retained in accordance with Public Resources 

Advisory’s document retention policies.   

 

 11. Messages sent through firm-approved communications methods were monitored, 

subject to review and archived.  Messages sent through unapproved communications methods 

were not monitored, subject to review or archived. 

 

 12. Public Resources Advisory had procedures for all employees, including 

supervisors, requiring their written acknowledgment that they had read and understood Public 

Resources Advisory’s electronic communications policies and were responsible for abiding by their 

provisions.  In addition, Public Resources Advisory conducted training and provided reminders to 

employees regarding the requirements of its electronic communication policies.  However, Public 



 4 

Resources Advisory did not have processes in place to review, test or modify its reliance on 

employees’ written acknowledgments. 

 

 13.  All of Public Resources Advisory’s employees that sent or received off-channel 

communications, including supervisors, acknowledged in writing that they understood the 

electronic communications policies and were responsible for abiding with them, yet did not follow 

these policies.  Public Resources Advisory’s reliance on employees’ acknowledgment was not 

reasonably designed to achieve compliance with the recordkeeping requirements because it was 

not reliable absent appropriate follow-up measures.  Accordingly, Public Resources Advisory’s 

supervisory system was not reasonably designed to achieve compliance with recordkeeping 

requirements. 

 

Recordkeeping Failures 

 

 14. 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.  Public Resources Advisory cooperated with the investigation by voluntarily gathering, 

reviewing and producing messages found on employees’ electronic devices.   

 

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

seniority levels of Public Resources Advisory.  The investigation determined that, during the 

relevant period, multiple Public Resources Advisory personnel had engaged in off-channel 

communications relating to municipal advisory activities involving both other employees of Public 

Resources Advisory and external contacts that were not preserved.    

 

 16.  For example, a municipal advisor representative of Public Resources Advisory 

exchanged text messages with a municipal issuer client addressing credit ratings for an anticipated 

municipal bond issuance. The text exchange also communicated information about a different 

series of bonds, expected to be issued at the same time as the first series. The communication 

about the second series of bonds described a lender’s response to the municipal issuer client’s 

request for the deletion of an event of default in financing documents and the municipal advisor 

representative’s response to the lender. For another example, a municipal advisor principal of 

Public Resources Advisory texted a municipal issuer client describing improvement in municipal-

securities market conditions, a request from a placement agent to execute a Bond Purchase 

Agreement and indicating approval that the client should proceed. 

.   

 



 5 

Violations 

   

17. As a result of the conduct described above, during the relevant period, Public 

Resources Advisory willfully3 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.   

 

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

Resources Advisory 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.   

 

19. As a result of Public Resources Advisory’s willful violations of MSRB Rules G-8, 

G-9 and G-44, Public Resources Advisory 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 

 

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

undertaken by Public Resources Advisory and the cooperation afforded the Commission staff.  Prior to 

this action, Public Resources Advisory conducted additional training and enhanced its policies and 

procedures concerning the use of approved communications methods, including by requiring quarterly 

attestations.   

 

Undertakings 

 

 21. In addition, Public Resources Advisory has undertaken to: 

 

                                           
3  “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 

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 Respondent responsible for ensuring 

compliance by Respondent 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 

Respondent 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 

Respondent 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 Respondent Public Resources Advisory’s Offer. 

 

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

ORDERED that: 
 

  A. Respondent Public Resources Advisory 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 Public Resources Advisory is censured. 



 7 

 

 C. Respondent Public Resources Advisory shall comply with the undertakings 

enumerated in paragraph 21. 
 

D. Respondent Public Resources Advisory shall, within 10 days of the entry of this 

Order, pay a civil money penalty in the amount of $184,000.00 to the Securities and Exchange 

Commission, of which $46,000.00 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 

$138,000.00 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 may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent 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 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 

Public Resources Advisory as the Respondent 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 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’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 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 

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


 8 

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”  



 9 

means a private damages action brought against Respondent 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  


	Undertakings
	21. In addition, Public Resources Advisory 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 federal h...
	IV.