Aaron Fletcher and his firm Twin Spires Financial have entered a final judgment with the Securities and Exchange Commission over their alleged role in providing false financials to the Louisiana Bond Commission in connection with two municipal bond offerings between 2017 and 2018 for the town of Sterlington, Louisiana, as well as the firm’s failure to register as a municipal advisor.

Without admitting or denying the findings, Fletcher and Twin Spires consented to the entry of judgments and will pay a disgorgement of $26,303, plus prejudgment interest of $6,642.88 and a $200,000 civil penalty.

Sterlington Mayor Vern Breland, who was also charged with fraud by the SEC, is still arguing his case in court.

“The city of Sterlington was experiencing financial issues just like other small towns in northeast Louisiana during the time period … the expenditures in question were never intended to violate the law and were made solely for the purpose of covering short-term problems until long-term financing could be put in place,” Breland said in defense of his actions.

Breland has also been indicted by the state for malfeasance in office. Under his tenure, the state charges, the town accumulated some $20 million in debt, spent $3 million on unlawful expenditures, skirted public laws on bidding for projects as large as $2 million and falsified documents sent to the state.

The SEC generally doesn’t seek retribution against municipalities due to the negative impact on taxpayers and Sterlington has, without admitting or denying the findings, agreed to a cease-and-desist order.

The matter began in 2015 when the town made plans to upgrade its sewer system and brought on Fletcher and Twin Spires Financial to provide municipal advisory services, despite their not being registered with the SEC.

Sterlington applied to the Louisiana State Bond Commission for the approval of its Series 2017 $4 million utility revenue bonds and the following year, sought approval of its Series 2018 $1.8 million wastewater, water and sewer treatment utilities revenue bonds.

“The SEC alleged that Sterlington submitted false financial projections created by Fletcher and Twin Spires, which substantially overstated the number of historical and projected sewer customers in order to mislead the SBC as to the town’s ability to cover the debt service for the proposed bonds,” the SEC judgment said.

Investors in the bonds, which were sold through private placement, were not informed that approval of the bonds was based on false projections.