In re FUNDING THE GAP

UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 90002 / September 25, 2020 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-20072 
 
 
In the Matter of 
 
FUNDING THE GAP, LLC 
and IRENE P. CARROLL  
 
Respondents. 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER  
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public interest that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 
21C of the Securities Exchange Act of 1934 (“Exchange Act”) against Funding the Gap, LLC 
(“FTG”) and Irene P. Carroll (“Carroll”) (together, “Respondents”). 
 
II. 
 
 In anticipation of the institution of these proceedings, Respondents have submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over the Respondents and the subject matter of 
these proceedings, which are admitted, and except as provided herein in Section V, Respondents 
consent to the entry of this Order Instituting Cease-and-Desist Proceedings Pursuant to Section 
21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist 
Order (“Order”), as set forth below. 
 
 
 
 
  

 
III. 
 
On the basis of this Order and Respondents’ Offer, the Commission finds
1
 that:  
 
Summary 
 
1. This matter involves unregistered municipal advisory activity by Funding the Gap, 
LLC (“FTG”), a Scottsdale, Arizona based entity, and its principal, Irene P. Carroll.   
 
2. Starting as early as July 2014 and continuing through September 2019, FTG and 
Carroll provided municipal advice to twelve charter schools in connection with the issuance of 
municipal bonds.  FTG and Carroll provided advice with respect to twelve municipal bond 
offerings sold via conduit issuers that cumulatively raised $222 million.   FTG was paid fees for 
the services FTG and Carroll provided to the charter schools in connection with these bond 
offerings. 
 
3. During this period, FTG was not registered as a municipal advisor, and was not 
subject to any exemptions or exclusions from registration while providing advice to its municipal 
entity clients.  As a result, FTG violated Section 15B(a)(1)(B) of the Exchange Act by failing to 
register as a municipal advisor, and Carroll caused FTG’s violation. 
 
Respondents 
 
4. Funding the Gap, LLC is an Arizona limited liability company organized in 2011 
and located in Scottsdale, Arizona.  FTG provides financing and real estate consulting services to 
charter and private schools.  FTG has never registered with the Commission as a municipal 
advisor. 
 
5. Irene P. Carroll, of Scottsdale, Arizona is principal and one of two initial members 
of FTG.  She has solely controlled the firm since approximately 2017.  Separately, Carroll wholly-
owns and is an associated person of an entity that registered with the Commission as a municipal 
advisor effective September 27, 2019 and registered with the Municipal Securities Rulemaking 
Board as a municipal advisor on January 17, 2020.  
 
Facts 
 
6. A municipal advisor is a person (who is not a municipal entity or an employee of a 
municipal entity) that provides advice to or on behalf of a municipal entity or obligated person with 
respect to municipal financial products or the issuance of municipal securities, including advice 
with respect to the structure, timing, terms, and other similar matters concerning such financial 
products or issues, or that undertakes a solicitation of a municipal entity or obligated person.  
Exchange Act Section 15B(e)(4)(A).   
                                                 
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. 

 
 
7. Section 15B(a)(1)(B) of the Exchange Act requires all municipal advisors to 
register with the Commission.  The registration requirements and regulatory standards for 
municipal advisors are intended to mitigate some of the problems observed with the conduct of 
some municipal advisors, including “pay to play” practices, undisclosed conflicts of interest, 
advice rendered by financial advisors without adequate training or qualifications, and failure to 
place the duty of loyalty to their clients ahead of their own interests. 
 
8. Charter schools, such as FTG’s clients, are generally considered municipal entities, 
because they are public schools and derive their charter from a political subdivision of a state.  
Registration of Municipal Advisors, SEC Release No. 34-70462 at 69 (Sept. 20, 2013). 
 
9. With respect to the issuance of municipal securities, municipal advisors, among 
other things, may assist municipal entities in developing a financing plan, assist municipal entities 
in evaluating different financing options and structures, assist in the selection of other parties to the 
financing (such as bond counsel and underwriters), coordinate the rating process, ensure adequate 
disclosure, and/or evaluate and negotiate the financing terms. Registration of Municipal Advisors, 
SEC Release No. 34-70462 at 17 (Sept. 20, 2013). 
 
10. Carroll co-founded FTG in Arizona in 2011, and has primarily controlled and 
operated FTG during the relevant time period.  On its website and in marketing materials, FTG 
describes itself as a capital advisory and real estate services firm for charter schools and other 
education-related entities.  FTG’s clients are primarily charter schools located throughout the 
United States, including Florida, Colorado, Texas and South Carolina.  Each of the twelve charter 
schools that FTG and Carroll advised received its charter from a political subdivision of the state in 
which it is located. 
 
11. Between at least July 2014 and September 2019, FTG and Carroll provided 
municipal advice to twelve charter schools that included advice with respect to structure, timing, 
and terms and other similar matters concerning such financial products or issues.  The services 
FTG and Carroll provided to their charter school clients in connection with their bond offerings 
included some services which are routinely provided by a registered municipal advisor to 
municipal entities and obligated persons.  This included advice on (1) financing structures and 
interest rates; (2) debt service analysis and amortization schedules; (3) selection of the conduit 
municipal issuer for bonds; and (4) selection of the underwriter.  
 
12. For example, in connection with an $11.9 million municipal bond offering in 
September 2018, FTG and Carroll advised their charter school client on the interest rate of the 
bonds, including the reasonableness of the expected rate in light of current market conditions.  In 
another example, in connection with a $32 million municipal bond offering in February 2019, 
FTG and Carroll prepared a document on behalf of their client, which included estimates of total 
offering amounts, interest rates and term, sources and uses of funds, and bond amortization.  
Similarly, in connection with a $53 million municipal bond offering in June 2019, FTG and 
Carroll provided input to their client on the structure of proposed municipal bonds, (specifically 

 
regarding bond tranches) and prepared a schedule for their client including issuance amounts, 
interest, and issuance expenses. 
    
13. Cumulatively, the twelve charter schools advised by FTG and Carroll borrowed 
directly, or through related entities, $222 million through municipal bonds offerings, primarily to 
fund school building and campus development costs.  FTG was paid fees for the services provided 
to the charter schools, which included, in addition to municipal advisory services, certain real 
estate, construction, and other consulting services related to campus and organization development. 
 
14. Carroll was aware of the municipal advisor registration requirements as early as 
2011 and she understood that she and FTG were providing services similar to those typically 
provided by registered municipal advisors.  For example, in July 2018, Carroll told a charter school 
client that FTG’s “services encompass far more than what [a municipal advisor] provides.”  
Despite this, neither FTG nor Carroll was registered as a municipal advisor.  Carroll did not 
represent herself or FTG as registered municipal advisors. 
 
Violations 
 
15. Section 15B(a)(1)(B) of the Exchange Act, makes it unlawful for “a municipal 
advisor to provide advice to or on behalf of a municipal entity or obligated person with respect to 
municipal financial products or the issuance of municipal securities,” without being registered 
under the Commission’s final municipal advisor rules. 
 
16. The Exchange Act defines the term “municipal advisor” to include a person that 
“provides advice to or on behalf of a municipal entity or obligated person with respect to municipal 
financial products or the issuance of municipal securities, including advice with respect to the 
structure, timing, terms, and other similar matters concerning such financial products or issues....”  
See Exchange Act, Section 15B(e)(4)(A)(i).  The term “municipal advisor” “includes financial 
advisors” who provide such advice. See Exchange Act, Section 15B(e)(4)(B).  Charters schools are 
generally considered municipal entities. See Registration of Municipal Advisors, SEC Release No. 
34-70462 at 69 (Sept. 20, 2013). 
 
17. As a result of the conduct described above, FTG violated Section 15B(a)(1)(B) of 
the Exchange Act by failing to register as a municipal advisor with the Commission.   
 
18. The Commission may institute cease-and-desist proceedings against any person 
held to be a cause of violations of the federal securities laws due to acts or omissions such person 
knew or should have known would contribute to the violation. See 15 U.S.C. § 78u-3(a); Robert 
M. Fuller, 56 SEC 976, 984 (2003), pet. denied, 95 F. App’x 361 (D.C. Cir. 2004). 
 
19. As a result of the conduct described above, Carroll was a cause of FTG’s violation 
of Section 15(B)(a)(1)(B) of the Exchange Act for failing to register with the Commission.   
 

 
 
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, it is hereby ORDERED that: 
 
A. Pursuant to Section 21C of the Exchange Act, Respondent FTG and Carroll: 
 
(1) Shall cease and desist from committing or causing any violations and any future 
violations of Section 15B(a)(1)(B) of the Exchange Act; and 
 
(2) Shall, within 60 days of the entry of this Order, pay, jointly and severally, a civil 
money penalty in the amount of $30,000.00 to the Commission for transfer to 
the general fund of the United States Treasury, subject to Section 21F(g)(3) of 
the Exchange Act.  If timely payment is not made, additional interest shall 
accrue pursuant to 31 U.S.C. §3717.  
 
B.  Payment must be made in one of the following ways:   
 
(1) Respondents may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondents 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) Respondents 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 FTG 
or Carroll, respectively, as a 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, 33 Arch Street, 
23rd Floor, Boston, MA 02110-1424.  
 
 C. 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, Respondents agree that in any Related Investor 
Action, they shall not argue that they are entitled to, nor shall they benefit by, offset or reduction of 
any award of compensatory damages by the amount of any part of Respondents’ payment of a civil 
penalty in this action ("Penalty Offset").  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondents agree that they 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 Respondents 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. 
 
V. 
 
It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 
523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 
Respondent Carroll, and further, any debt for disgorgement, prejudgment interest, civil penalty or 
other amounts due by Respondent Carroll under this Order or any other judgment, order, consent 
order, decree or settlement agreement entered in connection with this proceeding, is a debt for the 
violation by Respondent Carroll of the federal securities laws or any regulation or order issued 
under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 
 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
        Secretary 
 
 
 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 90002 / September 25, 2020 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-20072 

 

 

In the Matter of 

 

FUNDING THE GAP, LLC 

and IRENE P. CARROLL  

 

Respondents. 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER  

 

I. 
 

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

public interest that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 

21C of the Securities Exchange Act of 1934 (“Exchange Act”) against Funding the Gap, LLC 

(“FTG”) and Irene P. Carroll (“Carroll”) (together, “Respondents”). 

 

II. 

 

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

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

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over the Respondents and the subject matter of 

these proceedings, which are admitted, and except as provided herein in Section V, Respondents 

consent to the entry of this Order Instituting Cease-and-Desist Proceedings Pursuant to Section 

21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist 

Order (“Order”), as set forth below. 

 

 

 

 

  



 

III. 

 

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

 

Summary 
 

1. This matter involves unregistered municipal advisory activity by Funding the Gap, 

LLC (“FTG”), a Scottsdale, Arizona based entity, and its principal, Irene P. Carroll.   

 

2. Starting as early as July 2014 and continuing through September 2019, FTG and 

Carroll provided municipal advice to twelve charter schools in connection with the issuance of 

municipal bonds.  FTG and Carroll provided advice with respect to twelve municipal bond 

offerings sold via conduit issuers that cumulatively raised $222 million.   FTG was paid fees for 

the services FTG and Carroll provided to the charter schools in connection with these bond 

offerings. 

 

3. During this period, FTG was not registered as a municipal advisor, and was not 

subject to any exemptions or exclusions from registration while providing advice to its municipal 

entity clients.  As a result, FTG violated Section 15B(a)(1)(B) of the Exchange Act by failing to 

register as a municipal advisor, and Carroll caused FTG’s violation. 

 

Respondents 
 

4. Funding the Gap, LLC is an Arizona limited liability company organized in 2011 

and located in Scottsdale, Arizona.  FTG provides financing and real estate consulting services to 

charter and private schools.  FTG has never registered with the Commission as a municipal 

advisor. 

 

5. Irene P. Carroll, of Scottsdale, Arizona is principal and one of two initial members 

of FTG.  She has solely controlled the firm since approximately 2017.  Separately, Carroll wholly-

owns and is an associated person of an entity that registered with the Commission as a municipal 

advisor effective September 27, 2019 and registered with the Municipal Securities Rulemaking 

Board as a municipal advisor on January 17, 2020.  

 

Facts 

 

6. A municipal advisor is a person (who is not a municipal entity or an employee of a 

municipal entity) that provides advice to or on behalf of a municipal entity or obligated person with 

respect to municipal financial products or the issuance of municipal securities, including advice 

with respect to the structure, timing, terms, and other similar matters concerning such financial 

products or issues, or that undertakes a solicitation of a municipal entity or obligated person.  

Exchange Act Section 15B(e)(4)(A).   

                                                 
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. 



 

 

7. Section 15B(a)(1)(B) of the Exchange Act requires all municipal advisors to 

register with the Commission.  The registration requirements and regulatory standards for 

municipal advisors are intended to mitigate some of the problems observed with the conduct of 

some municipal advisors, including “pay to play” practices, undisclosed conflicts of interest, 

advice rendered by financial advisors without adequate training or qualifications, and failure to 

place the duty of loyalty to their clients ahead of their own interests. 

 

8. Charter schools, such as FTG’s clients, are generally considered municipal entities, 

because they are public schools and derive their charter from a political subdivision of a state.  

Registration of Municipal Advisors, SEC Release No. 34-70462 at 69 (Sept. 20, 2013). 

 

9. With respect to the issuance of municipal securities, municipal advisors, among 

other things, may assist municipal entities in developing a financing plan, assist municipal entities 

in evaluating different financing options and structures, assist in the selection of other parties to the 

financing (such as bond counsel and underwriters), coordinate the rating process, ensure adequate 

disclosure, and/or evaluate and negotiate the financing terms. Registration of Municipal Advisors, 

SEC Release No. 34-70462 at 17 (Sept. 20, 2013). 

 

10. Carroll co-founded FTG in Arizona in 2011, and has primarily controlled and 

operated FTG during the relevant time period.  On its website and in marketing materials, FTG 

describes itself as a capital advisory and real estate services firm for charter schools and other 

education-related entities.  FTG’s clients are primarily charter schools located throughout the 

United States, including Florida, Colorado, Texas and South Carolina.  Each of the twelve charter 

schools that FTG and Carroll advised received its charter from a political subdivision of the state in 

which it is located. 

 

11. Between at least July 2014 and September 2019, FTG and Carroll provided 

municipal advice to twelve charter schools that included advice with respect to structure, timing, 

and terms and other similar matters concerning such financial products or issues.  The services 

FTG and Carroll provided to their charter school clients in connection with their bond offerings 

included some services which are routinely provided by a registered municipal advisor to 

municipal entities and obligated persons.  This included advice on (1) financing structures and 

interest rates; (2) debt service analysis and amortization schedules; (3) selection of the conduit 

municipal issuer for bonds; and (4) selection of the underwriter.  

 

12. For example, in connection with an $11.9 million municipal bond offering in 

September 2018, FTG and Carroll advised their charter school client on the interest rate of the 

bonds, including the reasonableness of the expected rate in light of current market conditions.  In 

another example, in connection with a $32 million municipal bond offering in February 2019, 

FTG and Carroll prepared a document on behalf of their client, which included estimates of total 

offering amounts, interest rates and term, sources and uses of funds, and bond amortization.  

Similarly, in connection with a $53 million municipal bond offering in June 2019, FTG and 

Carroll provided input to their client on the structure of proposed municipal bonds, (specifically 



 

regarding bond tranches) and prepared a schedule for their client including issuance amounts, 

interest, and issuance expenses. 

    

13. Cumulatively, the twelve charter schools advised by FTG and Carroll borrowed 

directly, or through related entities, $222 million through municipal bonds offerings, primarily to 

fund school building and campus development costs.  FTG was paid fees for the services provided 

to the charter schools, which included, in addition to municipal advisory services, certain real 

estate, construction, and other consulting services related to campus and organization development. 

 

14. Carroll was aware of the municipal advisor registration requirements as early as 

2011 and she understood that she and FTG were providing services similar to those typically 

provided by registered municipal advisors.  For example, in July 2018, Carroll told a charter school 

client that FTG’s “services encompass far more than what [a municipal advisor] provides.”  

Despite this, neither FTG nor Carroll was registered as a municipal advisor.  Carroll did not 

represent herself or FTG as registered municipal advisors. 

 

Violations 

 

15. Section 15B(a)(1)(B) of the Exchange Act, makes it unlawful for “a municipal 

advisor to provide advice to or on behalf of a municipal entity or obligated person with respect to 

municipal financial products or the issuance of municipal securities,” without being registered 

under the Commission’s final municipal advisor rules. 

 

16. The Exchange Act defines the term “municipal advisor” to include a person that 

“provides advice to or on behalf of a municipal entity or obligated person with respect to municipal 

financial products or the issuance of municipal securities, including advice with respect to the 

structure, timing, terms, and other similar matters concerning such financial products or issues….”  

See Exchange Act, Section 15B(e)(4)(A)(i).  The term “municipal advisor” “includes financial 

advisors” who provide such advice. See Exchange Act, Section 15B(e)(4)(B).  Charters schools are 

generally considered municipal entities. See Registration of Municipal Advisors, SEC Release No. 

34-70462 at 69 (Sept. 20, 2013). 

 

17. As a result of the conduct described above, FTG violated Section 15B(a)(1)(B) of 

the Exchange Act by failing to register as a municipal advisor with the Commission.   

 

18. The Commission may institute cease-and-desist proceedings against any person 

held to be a cause of violations of the federal securities laws due to acts or omissions such person 

knew or should have known would contribute to the violation. See 15 U.S.C. § 78u-3(a); Robert 

M. Fuller, 56 SEC 976, 984 (2003), pet. denied, 95 F. App’x 361 (D.C. Cir. 2004). 

 

19. As a result of the conduct described above, Carroll was a cause of FTG’s violation 

of Section 15(B)(a)(1)(B) of the Exchange Act for failing to register with the Commission.   

 



 

 

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, it is hereby ORDERED that: 

 

A. Pursuant to Section 21C of the Exchange Act, Respondent FTG and Carroll: 

 

(1) Shall cease and desist from committing or causing any violations and any future 

violations of Section 15B(a)(1)(B) of the Exchange Act; and 

 

(2) Shall, within 60 days of the entry of this Order, pay, jointly and severally, a civil 

money penalty in the amount of $30,000.00 to the Commission for transfer to 

the general fund of the United States Treasury, subject to Section 21F(g)(3) of 

the Exchange Act.  If timely payment is not made, additional interest shall 

accrue pursuant to 31 U.S.C. §3717.  

 

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

 

(1) Respondents may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondents 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) Respondents 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 FTG 

or Carroll, respectively, as a 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, 33 Arch Street, 

23rd Floor, Boston, MA 02110-1424.  

 

 C. 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 

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


 

preserve the deterrent effect of the civil penalty, Respondents agree that in any Related Investor 

Action, they shall not argue that they are entitled to, nor shall they benefit by, offset or reduction of 

any award of compensatory damages by the amount of any part of Respondents’ payment of a civil 

penalty in this action ("Penalty Offset").  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondents agree that they 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 Respondents 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. 

 

V. 

 

It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 

Respondent Carroll, and further, any debt for disgorgement, prejudgment interest, civil penalty or 

other amounts due by Respondent Carroll under this Order or any other judgment, order, consent 

order, decree or settlement agreement entered in connection with this proceeding, is a debt for the 

violation by Respondent Carroll of the federal securities laws or any regulation or order issued 

under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 

 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

        Secretary