UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 98510 / September 25, 2023

ADMINISTRATIVE PROCEEDING

File No. 3-21717

In the Matter of

FIELDMAN ROLAPP & 

ASSOCIATES, INC. and 

ANNA SARABIAN

Respondents.

ORDER INSTITUTING 

ADMINISTRATIVE AND CEASE-ANDDESIST PROCEEDINGS, PURSUANT TO 

SECTIONS 15B(c) AND 21C OF THE 

SECURITIES EXCHANGE ACT OF 1934, 

MAKING FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS AND A CEASEAND-DESIST ORDER

I.

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

public interest that public administrative and cease-and-desist proceedings be, and hereby are, 

instituted pursuant to Sections 15B(c) and 21C of the Securities Exchange Act of 1934 (“Exchange 

Act”) against Fieldman Rolapp & Associates, Inc. (“FRA”) and Anna Sarabian (“Sarabian”) 

(together, “Respondents”). 

II.

In anticipation of the institution of these proceedings, Respondents have submitted Offers

of Settlement (the “Offers”) 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 them and the subject matter of these 

proceedings, which are admitted, and except as provided herein in Section V as to Sarabian, 

Respondents consent to the entry of this Order Instituting Administrative and Cease-and-Desist 

Proceedings, Pursuant to Sections 15B(c) and 21C of the Securities Exchange Act of 1934, Making 

Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth 

below. 
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III.

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

Summary

 1. This matter concerns a breach of the duty of care by registered municipal advisor 

Fieldman Rolapp & Associates, Inc. and one of its principals, Anna Sarabian, in the provision of 

advice to a California city (the “City”) regarding cost analyses of funding options for a 

community project. 

 2. Between October 2018 and July 2019, FRA made a series of presentations to the 

City with analyses of the costs of potential options to fund a community project. The City asked 

FRA to analyze the costs of certain financing options that ranged from using available funds 

without issuing new debt, financing the project entirely with debt with various maturity dates, 

and multiple hybrid options consisting of both cash and new debt with various maturity dates. 

Sarabian, the lead partner on FRA’s engagement with the City, was responsible for reviewing 

and editing the presentations, and attended numerous public and private meetings with City staff 

and council members. After the presentations and meetings, the City decided to finance the 

project entirely with new debt. 

 3. FRA’s model for calculating the net present value costs of the different financing 

options contained flawed assumptions that caused the 30-year 100% debt option to appear to be 

the least expensive option for financing, when, in fact, other options would have been less 

expensive on a net present value basis. 

 4. As a result of the conduct described herein, Respondents violated Section 

15B(c)(1) of the Exchange Act, and Rules G-17 and G-42(a)(ii) of the Municipal Securities 

Rulemaking Board (“MSRB”). 

Respondents

 5. FRA is a California corporation formed in 1974, located in Irvine, California. The 

firm has been registered with the Commission as a municipal advisor since July 2014 and has no 

disciplinary history.

 6. Sarabian, of Irvine, California, is a principal of FRA and has been with the firm 

since 2003. Sarabian is a Series 50 qualified representative who has passed the Series 50 – 

Municipal Advisor Representative Qualification Examination. She is also a Series 54 qualified 

principal who has passed the Series 54 – Municipal Advisor Principal Qualification Examination.

1 The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding on any other 

person or entity in this or any other proceeding.
3 

Facts

 7. The City retained FRA to analyze financing options for the development of a 

community center project. The City had cash available to pay for the project but wanted to 

explore the comparative costs involved if it, instead, issued debt to pay for all or part of the 

project. Sarabian, the lead partner on the engagement, was responsible for drafting and editing 

written submissions to the City. Sarabian also attended several meetings with City employees 

and council members. 

FRA Made Public and Private Presentations to the City 

 8. In October 2018, FRA made the first in a series of presentations to the City’s 

council members at a public meeting. This initial presentation set forth cost analyses of four 

financing options that the City asked FRA to evaluate for the project: (1) using available cash 

with no new debt; (2) financing 50% of the project with debt; (3) financing 60% of the project 

with debt; and (4) financing 100% of the project with debt. For each of the financing options 

involving the sale of debt, FRA also presented a cost analysis of repayment over 15, 20, and 30 

years, respectively. 

 9. Following the initial presentation, Sarabian participated in several non-public 

meetings attended by individual City council members and City employees to discuss the 

analysis in the presentation. These meetings allowed the council members to ask questions of 

Sarabian about the various financing options prior to a public vote. The City council formally 

voted to approve 100% debt financing at a public meeting. 

FRA’s Flawed Model Made It Appear That 100% Debt With the Longest Repayment Term 

Was the Most Cost-Effective Option on a Net Present Value Basis

 10. FRA’s model incorrectly represented that issuing long-term debt would be less 

expensive on a net present value basis for the City than paying cash. Specifically, FRA 

erroneously concluded that the “Total Cost over term” and the “[Present Value] of Total Cost 

over term” would be higher for the 100% cash financing option than for most of the debt 

financing options. 

 11. The problem with FRA’s conclusions arises from the difference between the 

interest rate the City would have to pay on the debt, and the interest rate the City could earn on 

its unspent cash. By issuing debt to fund the project, the City would save its cash and put it into 

an account that, according to FRA’s presentation, was estimated to earn 1.9 percent interest. 

However, the interest rate for the debt would be three percent. Because the interest rate on the 

debt was greater than the estimated savings interest rate, the City would be paying more in debt 

service interest than it would be earning in interest on savings. As a result, it is less expensive to 

pay for the project up front in cash than to issue debt and make debt payments. 

 

 12. FRA incorrectly reached the opposite conclusion in its presentation to the City 

because its model contained two interrelated problems, each relating to interest calculations. 

Specifically, (1) when applying the City-provided assumption that the City would keep all the 
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cash it saved by issuing debt in an interest-bearing account for the term of the debt, FRA failed 

to apply a corresponding assumption that the money earmarked for debt service in the scenarios 

involving debt would have been available to earn interest in the cash scenario; and (2) 

erroneously added as an expense the counterfactual interest the City could have earned on the 

spent cash, when instead the total cost of the 100% cash option should have simply been the 

amount of spent cash, which resulted in an increase in the total cost of the 100% cash option. 

Although FRA disclosed its use of these assumptions in its presentations to the City, FRA did 

not inform the City that the assumptions led to FRA’s model reaching the inaccurate conclusion 

that long-term debt would be less expensive on a net present value basis for the City than paying 

cash. 

After Receiving FRA’s Presentations, the City Issued Longer Term Debt, 

Which Will Be More Expensive than FRA Calculated

 13. The City voted to finance the project with 100% debt over 30 years. The actual 

cost to the City of issuing this debt will be more expensive than FRA’s calculation. Moreover, 

the cost to the City of issuing this debt will likely be more expensive than the cost would have 

been had the City chosen the all-cash option. 

Violations 

 14. As a result of the conduct described above, Respondents willfully2 violated 

Section 15B(c)(1) of the Exchange Act, which provides that any municipal advisor shall be 

deemed to have a fiduciary duty, which includes a duty of care, to any municipal entity for 

whom such municipal advisor acts as a municipal advisor and makes it unlawful for such 

municipal advisor to, among other things, “engage in any act, practice, or course of business 

which is not consistent” with that duty of care. In addition, Respondents willfully violated the 

provision of Section 15B(c)(1) of the Exchange Act that makes it unlawful for any municipal 

advisor to “engage in any act, practice, or course of business . . . that is in contravention of any 

rule” of the MSRB. 

 15. As a result of the conduct described above, Respondents willfully violated MSRB 

Rule G-17, which requires any municipal advisor, in the conduct of its municipal advisory 

activities, to “deal fairly with all persons” and makes it unlawful to “engage in any deceptive, 

dishonest, or unfair practice.” 

 16. As a result of the conduct described above, Respondents willfully violated MSRB 

Rule G-42(a)(ii), which provides that any municipal advisor to a municipal entity client shall, in 

the conduct of all municipal advisory activities for that client, be subject to, among other things, 

a duty of care. 

 

2 “Willfully,” for purposes of imposing relief under Section 15B of the Exchange Act, “means no more than that the 

person charged with the duty knows what he is doing.” Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir. 2000) 

(quoting Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949)). There is no requirement that the actor “also be aware 

that he is violating one of the Rules or Acts.” Tager v. SEC, 344 F.2d 5, 8 (2d Cir. 1965). 
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Disgorgement

 17. The disgorgement and prejudgment interest referenced in paragraph IV.B is 

consistent with equitable principles, as it does not exceed Respondent FRA’s net profits from its 

violations, and it will be distributed to the City to the extent feasible. The Commission will hold 

funds paid pursuant to paragraph IV.B in an account at the United States Treasury pending 

distribution. Upon approval of the distribution final accounting by the Commission, any amounts 

remaining that are infeasible to return to the City, and any amounts returned to the Commission in 

the future that are infeasible to return to the City, may be transferred to the general fund of the U.S. 

Treasury, subject to Section 21F(g)(3) of the Exchange Act.

IV.

On the basis of the foregoing, the Commission deems it appropriate and in the public 

interest to impose the sanctions agreed to in Respondents’ Offers. 

Accordingly, pursuant to Sections 15B(c) and 21C of the Exchange Act, it is hereby 

ORDERED that:

A. Respondents cease and desist from committing or causing any violations and any

future violations of Section 15B(c)(1) of the Exchange Act, MSRB Rule G-17, and MSRB 

Rule G-42(a)(ii). 

B. FRA shall, within 10 days of the entry of this Order, pay disgorgement of 

$56,548.50 and prejudgment interest of $11,368.77 to the Securities and Exchange Commission. 

If timely payment is not made, additional interest shall accrue pursuant to SEC Rule of Practice 

600.

C. FRA shall pay a civil money penalty in the amount of $60,000.00, and Sarabian 

shall pay a civil money penalty of $30,000.00, both within 10 days of the entry of this Order, 

to the Securities and Exchange Commission, of which a total of $22,500.00 shall be transferred 

to the MSRB in accordance with Section 15B(c)(9)(A) of the Exchange Act. If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. § 3717.

 

D. Payments must be made in one of the following ways:

(1) Respondents may transmit payments 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: 
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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 

FRA or Sarabian, 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 

Assistant Regional Director David Zhou, Division of Enforcement, Securities and Exchange 

Commission, 44 Montgomery Street, Suite 2800, San Francisco, CA 94104. 

E. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, a Fair Fund is created 

for the disgorgement, prejudgment interest, and penalty referenced in paragraphs IV.B and IV.C

above. 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 Respondent 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 the 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 Sarabian, and further, any debt for civil penalty or other amounts due by 

Respondent Sarabian 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 Sarabian 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