SEC Bars Aaron Fletcher Following $5.8 Million Municipal Bond Allegations

Aaron Fletcher (CRD #: 4892838), a broker formerly registered with Hutchinson, Shockey, Erley & Company, was barred by the SEC, according to his BrokerCheck record, accessed on August 26, 2022. This followed allegations that included his firm, Twin Spires Financial. Read on if you want to know more about Aaron Fletcher’s conduct as a broker.

SEC Injunction and Bar

On June 2, 2022, the Securities and Exchange Commission filed a complaint alleging that he caused his firm, Twin Spires Financial, to operate as an unregistered municipal advisor with regard to bonds issued by the firm in 2017 and 2018.

According to the SEC, Aaron Fletcher was the sole owner and employee of Twin Spires Financial and failed to register the firm as a municipal advisor before issuing bonds and providing municipal advisory services in 2015, 2017, and 2018.

The complaint alleges that the town of Sterlington, Louisiana sold $4 million in water and sewer utility bonds on April 27, 2017, and a $1.8 million refunding bond on September 28, 2018. These bonds were allegedly sold in private placements to investors and were supposed to finance the development of a water system and improved sewer system for the town.

Per Louisiana state law, these alleged bond offerings were applied to the Louisiana State Bond Commission (SBC) for approval. Aaron Fletcher, as Twin Spires Financial, allegedly created false projections of these bonds’ anticipated revenue to mislead the SBC regarding Sterlington’s ability to cover its debt service for the bonds.

The SEC alleged in its complaint that Aaron Fletcher and Twin Spires Financial violated the following regulations:

• Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933
• Sections 10(b) and 15B(c)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
• Municipal Securities Rulemaking Board Rules G-17 and G-42

Securities Act of 1933

Section 17(a) of the Securities Act of 1933 prohibits the use of deceptive schemes or practices to defraud customers participating in interstate securities transactions, including by making false statements or omitting material facts.

Securities Exchange Act of 1934

Section 10(b) of the Securities Exchange Act of 1934 forbids the use of deceptive or manipulative devices in the business of buying or selling securities. Within this section, Rule 10b-5 bans fraudulent schemes, untrue statements, and omissions of fact that mislead customers.

Section 15B(c)(1) bans brokers, dealers, and municipal securities dealers from manipulating or deceiving investors through fraudulent devices.

Section 15B(a)(1)(B) of the Securities Exchange Act bans municipal advisors from providing advice or soliciting to municipal entities unless they are registered as a municipal advisor.

MSRB Rules G-17 and G-42

MSRB Rule G-17 requires brokers, dealers, and municipal securities dealers and advisors to engage in fair dealing and prohibits them from engaging in unfair and deceptive practices.

MSRB Rule G-42 requires municipal advisors to uphold certain standards of ethical conduct, uphold their duty of care towards clients, and disclose conflicts of interest to clients before or upon engaging in advisory activities.

Sanctions

On June 14, 2022, the SEC filed a judgment subjecting Aaron Fletcher to an injunction, disgorgement of any ill-gotten gains (with prejudgment interest), a civil penalty, and undertakings. He was also permanently enjoined from committing future violations of the securities regulations listed above.

Background Information

Aaron Fletcher has passed the following exams:

• Series 63 – Uniform Securities Agent State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 50 – Municipal Advisor Representative Qualification Exam
• Series 7 – General Securities Representative Examination

He has also worked for the following firms:

• Hutchinson, Shockey, Erley & Company (CRD#:2261)
• First Kentucky Securities Corporation (CRD#:7524)
• Sterne, Agee & Leach (CRD#:791)
• M. R. Beal & Company (CRD#:22088)
• M. E. Allison & Company (CRD#:1047)
• Southwest Securities (CRD#:6220)
• First Albany Capital (CRD#:298)
• Southwest Securities (CRD#:6220)

Kurta Law Can Help

If you worked with Aaron Fletcher and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.