NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 21 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
UNITED STATES SECURITIES AND No. 24-6447 EXCHANGE COMMISSION, D.C. No. 3:21-cv-01669-JO-MSB Plaintiff - Appellee,
v. MEMORANDUM*
CHOICE ADVISORS, LLC; MATTHIAS O'MEARA,
Defendants - Appellants.
Appeal from the United States District Court for the Southern District of California Jinsook Ohta, District Judge, Presiding
Submitted November 19, 2025 Submission Vacated January 15, 2026 Resubmitted July 21, 2026** Pasadena, California
Before: CLIFTON, BYBEE, and DE ALBA, Circuit Judges.
Appellants, Matthias O’Meara and his company Choice Advisors, LLC,
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). appeal part of the district court’s summary judgment order and the remedies
imposed against Appellants for violating Securities and Municipal Securities
Rulemaking Board (“MSRB”) laws and for breaching their fiduciary duties in
providing municipal advisory services. We have jurisdiction pursuant to 28 U.S.C.
§ 1291, and we affirm.
We review a district court’s grant of summary judgment de novo. SEC v.
Husain, 70 F.4th 1173, 1180 (9th Cir. 2023). The district court’s determination of
remedies is reviewed for abuse of discretion. See SEC v. Murphy (Murphy II), 50
F.4th 832, 842 (9th Cir. 2022) (civil penalties and injunction); SEC v. Platforms
Wireless Int’l Corp., 617 F.3d 1072, 1096 (9th Cir. 2010) (disgorgement).
1. Appellants challenge the district court’s finding that their agreement with
BB&T constitutes an illegal fee-splitting arrangement under MSRB Rule G-
42(e)(1)(D). The district court correctly determined that this agreement constitutes
an illegal fee-splitting arrangement. When the interpretation of a statute is at issue,
the analysis begins with the plain language of the statute. United States v.
Johnson, 680 F.3d 1140, 1144 (9th Cir. 2012). By its plain language, the Rule
broadly prohibits “making, or participating, in any fee-splitting arrangement . . . .”
MSRB Rule G-42(e)(i)(D) (emphasis added). Although the provision does not
define “fee-splitting,” dictionaries define it as “payment by a specialist (such as a
doctor or a lawyer) of a part of his or her fee to the person who made the referral,”
2 24-6447 or “giving to a colleague who makes the referral part of the fee charged to a
referred client or patient.”1 This supports the district court’s finding that the
provision broadly prohibits all fee division agreements between municipal advisors
and bank underwriters.
Here, the undisputed record shows that Appellants and BB&T agreed that
BB&T would split its traditional 2% underwriting fees with Appellants for every
client Appellants referred to BB&T for underwriting services. The record also
shows that the arrangements between BB&T and Choice involved municipal
securities transactions where the charter schools retained Choice as municipal
advisor, Choice engaged in advising activities, and BB&T was the underwriter for
these securities transactions.
Appellants argue that their agreement with BB&T does not fall under the
prohibitions of Rule G-42 because the underwriting fee payment was structured to
go to both parties simultaneously. But how a fee-splitting payment is structured is
irrelevant. What matters is the existence of a fee-splitting agreement between an
underwriter and a municipal advisor because its existence creates a self-interested
financial incentive for the municipal advisor to direct its clients to a particular bank
1 See Merrian-Webster.com, https://www.merriam- webster.com/dictionary/fee%20splitting (last visited October 3, 2025) https://perma.cc/AE47-AGAV, and Collinsdictionary.com, https://www.collinsdictionary.com/dictionary/english/fee-splitting (last visited October 3, 2025) https://perma.cc/J2PC-X6YR, respectively.
3 24-6447 underwriter thereby, creating a conflict of interest—precisely what MSRB Rule 42
was created to prevent. See MSRB Rule G-42(a)(ii) (stating that municipal
advisors are subject to fiduciary duties); SEC v. Cap. Gains Rsch. Bureau, Inc.,
375 U.S. 180, 194 (1963).2 Thus, the district court did not err in finding
Appellants’ fee-splitting arrangement illegal.
2. Appellants also challenge the remedies imposed against them which
include injunctive relief, disgorgement, and civil penalties. The district court did
not abuse its discretion in permanently enjoining Appellants from future violations
of the federal securities laws. The district court properly evaluated the Murphy
factors to determine whether there was “a reasonable likelihood of future violations
of the securities laws,” and correctly concluded that the factors favored a
permanent injunction. SEC v. Fehn, 97 F.3d 1276, 1295–96 (9th Cir. 1996)
(quoting SEC v. Murphy, 626 F.2d 633, 655 (9th Cir. 1980)). Specifically, the
district court correctly found that Appellants were likely to violate securities laws
in the future because they planned to continue providing municipal advisory
services to, often unsophisticated, charter school clients; they failed to fully
appreciate the wrongfulness of their conduct; and despite taking precautions and
2 Appellants try to “incorporate” by reference a Due Process argument presented to the district court in their motion to dismiss. This argument is waived because Appellants failed to brief it in their opening brief. See also Ninth Cir. R. 28(a)(8), 28-1(b); Fed. R. App. P. 28(a)(8); Retlaw Broad. Co. v. N.L.R.B., 53 F.3d 1002, 1005 n.1 (9th Cir. 1995).
4 24-6447 not intending to cheat their clients, they still failed to police themselves and
knowingly and actively violated securities laws. See Murphy, 626 F.2d at 655;
Fehn, 97 F.3d at 1296.
Appellants’ assertions that their conduct constitutes simple negligence and
therefore, not enough to warrant a permanent injunction are mistaken. Appellants’
actions constitute more than simple negligence because they acted with disregard
in following compliance regulations, such as registering with the appropriate
agencies, and actively and knowingly engaged in municipal advisory activities and
acted in a dual capacity as an underwriter and an advisor, among other things.
Although scienter must be proved before an injunction is granted when scienter is
an element of the substantive provisions sought to be enjoined—which is not the
case here—proof of scienter is not required otherwise. See Aaron v. SEC, 446 U.S.
680, 701 (1980); Murphy, 626 F.2d at 654. Thus, the district court acted within its
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 21 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
UNITED STATES SECURITIES AND No. 24-6447 EXCHANGE COMMISSION, D.C. No. 3:21-cv-01669-JO-MSB Plaintiff - Appellee,
v. MEMORANDUM*
CHOICE ADVISORS, LLC; MATTHIAS O'MEARA,
Defendants - Appellants.
Appeal from the United States District Court for the Southern District of California Jinsook Ohta, District Judge, Presiding
Submitted November 19, 2025 Submission Vacated January 15, 2026 Resubmitted July 21, 2026** Pasadena, California
Before: CLIFTON, BYBEE, and DE ALBA, Circuit Judges.
Appellants, Matthias O’Meara and his company Choice Advisors, LLC,
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). appeal part of the district court’s summary judgment order and the remedies
imposed against Appellants for violating Securities and Municipal Securities
Rulemaking Board (“MSRB”) laws and for breaching their fiduciary duties in
providing municipal advisory services. We have jurisdiction pursuant to 28 U.S.C.
§ 1291, and we affirm.
We review a district court’s grant of summary judgment de novo. SEC v.
Husain, 70 F.4th 1173, 1180 (9th Cir. 2023). The district court’s determination of
remedies is reviewed for abuse of discretion. See SEC v. Murphy (Murphy II), 50
F.4th 832, 842 (9th Cir. 2022) (civil penalties and injunction); SEC v. Platforms
Wireless Int’l Corp., 617 F.3d 1072, 1096 (9th Cir. 2010) (disgorgement).
1. Appellants challenge the district court’s finding that their agreement with
BB&T constitutes an illegal fee-splitting arrangement under MSRB Rule G-
42(e)(1)(D). The district court correctly determined that this agreement constitutes
an illegal fee-splitting arrangement. When the interpretation of a statute is at issue,
the analysis begins with the plain language of the statute. United States v.
Johnson, 680 F.3d 1140, 1144 (9th Cir. 2012). By its plain language, the Rule
broadly prohibits “making, or participating, in any fee-splitting arrangement . . . .”
MSRB Rule G-42(e)(i)(D) (emphasis added). Although the provision does not
define “fee-splitting,” dictionaries define it as “payment by a specialist (such as a
doctor or a lawyer) of a part of his or her fee to the person who made the referral,”
2 24-6447 or “giving to a colleague who makes the referral part of the fee charged to a
referred client or patient.”1 This supports the district court’s finding that the
provision broadly prohibits all fee division agreements between municipal advisors
and bank underwriters.
Here, the undisputed record shows that Appellants and BB&T agreed that
BB&T would split its traditional 2% underwriting fees with Appellants for every
client Appellants referred to BB&T for underwriting services. The record also
shows that the arrangements between BB&T and Choice involved municipal
securities transactions where the charter schools retained Choice as municipal
advisor, Choice engaged in advising activities, and BB&T was the underwriter for
these securities transactions.
Appellants argue that their agreement with BB&T does not fall under the
prohibitions of Rule G-42 because the underwriting fee payment was structured to
go to both parties simultaneously. But how a fee-splitting payment is structured is
irrelevant. What matters is the existence of a fee-splitting agreement between an
underwriter and a municipal advisor because its existence creates a self-interested
financial incentive for the municipal advisor to direct its clients to a particular bank
1 See Merrian-Webster.com, https://www.merriam- webster.com/dictionary/fee%20splitting (last visited October 3, 2025) https://perma.cc/AE47-AGAV, and Collinsdictionary.com, https://www.collinsdictionary.com/dictionary/english/fee-splitting (last visited October 3, 2025) https://perma.cc/J2PC-X6YR, respectively.
3 24-6447 underwriter thereby, creating a conflict of interest—precisely what MSRB Rule 42
was created to prevent. See MSRB Rule G-42(a)(ii) (stating that municipal
advisors are subject to fiduciary duties); SEC v. Cap. Gains Rsch. Bureau, Inc.,
375 U.S. 180, 194 (1963).2 Thus, the district court did not err in finding
Appellants’ fee-splitting arrangement illegal.
2. Appellants also challenge the remedies imposed against them which
include injunctive relief, disgorgement, and civil penalties. The district court did
not abuse its discretion in permanently enjoining Appellants from future violations
of the federal securities laws. The district court properly evaluated the Murphy
factors to determine whether there was “a reasonable likelihood of future violations
of the securities laws,” and correctly concluded that the factors favored a
permanent injunction. SEC v. Fehn, 97 F.3d 1276, 1295–96 (9th Cir. 1996)
(quoting SEC v. Murphy, 626 F.2d 633, 655 (9th Cir. 1980)). Specifically, the
district court correctly found that Appellants were likely to violate securities laws
in the future because they planned to continue providing municipal advisory
services to, often unsophisticated, charter school clients; they failed to fully
appreciate the wrongfulness of their conduct; and despite taking precautions and
2 Appellants try to “incorporate” by reference a Due Process argument presented to the district court in their motion to dismiss. This argument is waived because Appellants failed to brief it in their opening brief. See also Ninth Cir. R. 28(a)(8), 28-1(b); Fed. R. App. P. 28(a)(8); Retlaw Broad. Co. v. N.L.R.B., 53 F.3d 1002, 1005 n.1 (9th Cir. 1995).
4 24-6447 not intending to cheat their clients, they still failed to police themselves and
knowingly and actively violated securities laws. See Murphy, 626 F.2d at 655;
Fehn, 97 F.3d at 1296.
Appellants’ assertions that their conduct constitutes simple negligence and
therefore, not enough to warrant a permanent injunction are mistaken. Appellants’
actions constitute more than simple negligence because they acted with disregard
in following compliance regulations, such as registering with the appropriate
agencies, and actively and knowingly engaged in municipal advisory activities and
acted in a dual capacity as an underwriter and an advisor, among other things.
Although scienter must be proved before an injunction is granted when scienter is
an element of the substantive provisions sought to be enjoined—which is not the
case here—proof of scienter is not required otherwise. See Aaron v. SEC, 446 U.S.
680, 701 (1980); Murphy, 626 F.2d at 654. Thus, the district court acted within its
discretion in issuing the permanent injunction.
The district court also did not abuse its discretion in ordering disgorgement
and prejudgment interest of the ill-gotten gains from Appellants’ violations.
Afterall, these are gains that Appellants were not entitled to receive in the first
place because they were not authorized to give municipal securities advice to
clients since Appellants were not properly registered. SEC v. First Pac. Bancorp,
142 F.3d 1186, 1191 (9th Cir.1998); SEC v. Feng, 935 F.3d 721, 737 (9th Cir.
5 24-6447 2019). As to Appellants’ argument that disgorgement should not be issued absent
pecuniary harm to investors, we recently held that the SEC is not required to show
that investors suffered pecuniary harm as a precondition to a disgorgement award
under Sections 78u(d)(5) or (d)(7). See SEC v. Sripetch, 154 F.4th 980, 985 (9th
Cir. 2025), aff’d sub nom. No. 25-466, 2026 WL 1593329 (U.S. June 4, 2026).
Likewise, the district court acted within its discretion in imposing civil
penalties because it reasonably found that additional deterrence was warranted
given Appellants’ knowing misconduct and failure to fully appreciate its
wrongfulness. See 15 U.S.C. § 78u(d)(3)(B)(i)-(iii). Although the district court
considered Appellants’ general assertion that they did not have the ability to pay,
the district court correctly determined that Appellant’s failed to support their
claims with quantifiable evidence. See Murphy II, 50 F.4th at 847. Accordingly,
civil penalties were properly imposed.
AFFIRMED.3
3 Appellants’ Motion to File Supplemental Briefing (Dkt. No. 47) is DENIED.
6 24-6447