Matthias O'Meara and his municipal advisor firm Choice Advisors, LLC, are challenging what they described in a federal appeals court filing Tuesday as "unconstitutional maneuverings" by the Securities and Exchange Commission.
The case stems from the SEC's decision to pursue both litigation and administrative action against O'Meara and Choice for securities fraud, according to their Feb. 17 opening brief filed in the U.S. Court of Appeals for the Tenth Circuit.
"This split enforcement action is unconstitutional and unlawful," the court filing said.
According to the brief, O'Meara and Choice in 2018 "successfully helped two charter schools raise finances through bond issues." At the time the bonds were issued, however, O'Meara and Choice hadn't completed their registration as "municipal-securities advisors" with the SEC according to the filing, which also said that the bonds were underwritten by a bank where O'Meara had briefly remained employed as he was launching Choice.
While the charter school clients offered sworn testimony praising O'Meara's work and the SEC never alleged any loss on the part of investors, "the SEC has vigorously pursued appellants for alleged securities fraud in two forums," the brief said.
First, the SEC brought suit in the U.S. District Court for the Southern District of California "and obtained summary judgment on strict-liability and negligence claims—but not on its lone scienter-based claim," O'Meara and Choice said in their brief.
The district court ordered disgorgement and prejudgment interest totaling $286,529 and also assessed penalties totaling $213,038, the brief said. That court also issued "a permanent follow-the-law injunction" after finding there was a likelihood of future violations of the Securities Exchange Act of 1934 and Municipal Securities Rulemaking Board rules, the brief said.
A week after the district court issued its amended injunction in October 2024 – and even though O'Meara and Choice had filed an appeal of the district court's decision with the Ninth Circuit – "the SEC commenced the administrative phase of this case—a 'follow-on' proceeding—to decide whether to impose a lifetime industry bar against O'Meara and to censure Choice," the brief said.
"The SEC could have sought these remedies in district court, where they are available, but, because of the constitutional and procedural protections guaranteed in Article III courts, more difficult to obtain," O'Meara and Choice said in their brief.
"Thus, the commission seeks to inflict on O'Meara a lifetime ban—a 'career death penalty' —through its own in-house tribunal, where it will serve as prosecutor, judge, and jury, and where history shows it is all but certain to prevail," the brief said.
O'Meara and Choice, in response to the SEC's "in-house penalty proceeding," filed a lawsuit in the U.S. District Court for the District of Colorado seeking declaratory and injunctive relief, the brief said. In a Dec. 9, 2025 order, the Colorado court denied a motion by plaintiffs O'Meara and Choice seeking a preliminary injunction and granted the SEC's motion to dismiss.
In their opening brief relating to their appeal of the Colorado district court's decision, O'Meara and Choice alleged four causes of action at issue in the appeal.
First, the SEC's administrative proceeding "violates Article III of the Constitution, which vests the government's judicial power in independent judges, not in executive branch agencies like the SEC," the brief said.
"Second, the SEC's combination of prosecutorial and judicial functions, the obvious incentives for bias, and the agency's near-perfect record in these proceedings, violate O'Meara and Choice's due process rights," the filing said.
Thirdly, the SEC's decision to split its securities fraud case between federal court and an in-house tribunal violates "O'Meara and Choice's right to a jury trial …which also, fourth, violates the doctrine of res judicata."
The brief urged the appeals court to reverse the Colorado district court's decision.
