UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF LOUISIANA

__________________________________________

) 

SECURITIES AND EXCHANGE COMMISSION, )

 ) 

 ) 

Plaintiff, ) Civil Action No.: 

) 

 v. ) 

) 

AARON B. FLETCHER and TWIN SPIRES ) 

FINANCIAL LLC, ) 

) 

Defendants. ) 

_________________________________________ _ ) 

COMPLAINT 

Plaintiff United States Securities and Exchange Commission (the “SEC”) 

alleges:

SUMMARY OF ALLEGATIONS

1. This Case involves the use of fraudulent financial projections by an 

unregistered municipal adviser, Twin Spires Financial LLC (“Twin Spires”) and its 

sole owner and employee, Aaron B. Fletcher (“Fletcher”) (collectively, the 

“Defendants”) in connection with issuance of municipal bonds in 2017 and 2018 

by their client, the Town of Sterlington, Louisiana (the “Town” or “Sterlington”). 

Twin Spires also failed to register as a municipal advisor. 

2. On April 27, 2017, the Town sold $4 million water and sewer utility 

revenue bonds (“2017 Bonds”), and on September 28, 2018, it sold a $1.8 million 

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refunding bond (refunding two 2015 water and sewer utility revenue bonds) 

(“2018 Bonds”) (collectively, the “Bonds”). The Bonds, which were sold in 

private placements to investors, were intended to finance development of a water 

system for the Town and improvements to its existing sewer system. 

3. As required by Louisiana law, the Town applied to the Louisiana State 

Bond Commission (“SBC”) for its approval of these bond offerings. The Town’s 

applications for the 2017 Bonds and 2018 Bonds were submitted to the SBC on 

January 18, 2017 and July 18, 2018, respectively.

4. In support of each application, the Town submitted false financial 

projections about the anticipated revenue of the Town’s sewer system. Vern A. 

Breland, then the Mayor of the Town, actively participated in and approved the 

false projections, which were created by the Town’s municipal adviser, Twin 

Spires, through its owner and sole employee, Fletcher, and misled the SBC as to 

the Town’s ability to cover its debt service for the proposed bonds. Investors in the 

2017 Bonds and 2018 Bonds were not informed that the Town had obtained SBC 

approval of the Bonds based on false projections.

5. Twin Spires and Fletcher also provided municipal advisory services to 

the Town between 2015 and 2018 without being properly registered with the SEC.

6. As a result of this conduct, the Defendants violated Sections 17(a)(1) 

and 17(a)(3) of the Securities Act of 1933 (“Securities Act”); Sections 10(b) and 

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15B(c)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b5 thereunder; Municipal Securities Rulemaking Board (“MSRB”) Rules G-17and 

G-42, and aided and abetted Sterlington’s violations of Section 17(a)(2) of the 

Securities Act; and, Twin Spires violated, and Fletcher aided and abetted its 

violations of, Section 15B(a)(1)(B) of the Exchange Act.

DEFENDANTS 

7. Aaron B. Fletcher (“Fletcher”) is a resident of Frisco, TX. He 

wholly owns Twin Spires and is its sole employee and director. 

8. Twin Spires Financial LLC (“Twin Spires”) is a Texas company 

formed in July 2015, with its principal place of business in Frisco, TX. During the 

relevant period, Twin Spires conducted business as a municipal advisor but was 

not registered with the Commission. 

OTHER RELEVANT INDIVIDUAL AND ENTITY 

9. Vern A. Breland, age 59, is a resident of Columbia, Louisiana. 

Breland was elected as the Town’s Mayor in 2006 and resigned from office on 

October 1, 2018. On August 7, 2020, a Louisiana grand jury charged Breland for 

“malfeasance in office (a felony) between the dates of January 1st, 2017 and 

including September 30, 2018, willfully and unlawfully perform, refuse or fail to 

perform his duty as a public officer, contrary to the provisions of R.S. 14:134.” 

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The charge is based on the Town’s misuse of bond proceeds directed by Breland 

and the case is still pending.

10. Sterlington, Louisiana is a town with a current population of 

approximately 2,600 citizens located in the central northeastern part of the State of 

Louisiana. It is governed by an elected mayor and a five member board of aldermen. 

JURISDICTION AND VENUE

11. The SEC brings this action pursuant to authority conferred upon it by 

Sections 20(b) and 20(d) of the Securities Act [15 U.S.C. §§ 77t(b) and 77t(d)] and 

Sections 21(d) and 21(e) of the Exchange Act [15 U.S.C. §§ 78u(d) and 78(u)(e)].

12. This Court has jurisdiction over this action pursuant to Section 22(a) 

of the Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the 

Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].

13. Venue is proper in this District, because Sterlington is located within 

this District and the acts constituting violations of the federal securities laws 

alleged in this Complaint occurred within this District.

14. In connection with the conduct described in this Complaint, 

Defendants directly or indirectly made use of the mails, the means and 

instrumentalities of interstate commerce, or the means or instruments of 

transportation or communication in interstate commerce. 

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FACTUAL ALLEGATIONS

Sterlington Issued 2017 and 2018 Municipal Bonds to Finance 

Its Sewer and Water Projects

15. Beginning in or about 2015, Breland and the Town began municipal 

projects to upgrade the Town’s existing sewer system, purchase the water 

distribution system for its residents from a third-party entity (which owned and 

operated it since 1965), and build a water treatment facility. 

16. To fund these projects, Breland and the Town decided to pursue 

municipal bond offerings to raise the necessary funds. In June 2015, Breland 

executed a financial advisory agreement between the Town and Twin Spires 

pursuant to which Twin Spires agreed to provide, among other municipal advisory 

services for the Town, advice on various forms of debt financing.

17. In April 2017, the Town sold the 2017 Bonds ($4 million Utility 

Revenue Bonds, which included $3.5 million Utility Revenue Bonds, Series 2017A 

(Tax Exempt) and $500,000 Taxable Utility Revenue Bonds, Series 2017B). In 

September 2018, the Town sold the 2018 Bonds ($1.845 million of Wastewater, 

Water and Sewer Treatment Utilities Revenue Bonds, Series 2018). 

Overstatement of Sewer Customer and Revenue Projections 

In Application to Louisiana State Bond Commission

18. Prior to issuing municipal bonds or incurring any form of debt, 

Sterlington was required, by the Louisiana Constitution and state law, to obtain 

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approval of the SBC. As part of the approval process, the SBC requires the 

applicant to demonstrate the debt service coverage ratio (“DSCR”) for all its 

outstanding debt (including the proposed debt incurrence) would be at least 1.0 in 

the year of the highest annual future debt service payment based on projected net 

income for the next full year subsequent to submission of the application. DSCR is 

a ratio of net operating income to debt service obligations.

19. In both 2017 and 2018, the Town submitted an application to the 

SBC supported by, among other items, sewer and water system revenue and 

expense projections for the next full year, and expected aggregate debt service 

payments for all outstanding debt secured by sewer and water system revenues

(including the proposed bond issuance), which were utilized to calculate the 

Town’s DSCR.

20. The financial projections provided to the SBC included detailed 

estimates of the Town’s revenue and operating expenses for both the sewer and 

water systems on an annual basis, and annual expected debt service payments for 

all the Town’s outstanding debt, including the proposed offering. The projections 

included two prior fiscal years and the current fiscal year of the SBC application 

and each fiscal year thereafter through the maturity dates of outstanding debt and 

the proposed offering. 

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21. The financial projections prepared by Twin Spires, Fletcher and 

Breland, and submitted by the Town to the SBC for approval of the 2017 Bonds,

were false and misleading. As discussed below, the projections included an 

intentionally overstated sewer revenue projection for 2018. The overstated sewer 

revenue projection allowed Sterlington to falsely exceed a DSCR of 1.0 and obtain 

SBC approval for the proposed 2017 Bonds.

22. Breland, Fletcher and Twin Spires fraudulently projected that the 

Town would have 2,040 sewer customers in 2018 (and sewer system revenue of 

$864,693). They were aware that the customer projection was more than double 

Sterlington’s then-actual sewer customer number of 960 in 2016 (a 113% 

increase).

23. Breland, Twin Spires and Fletcher fraudulently projected an 

overstated 2018 sewer customer number of 2040 to reach the sewer revenue 

required to meet a DSCR of 1.0. As a result of the overstated projected customer 

number, the Town’s application falsely showed a projected DSCR of 1.02. 

Fletcher had no reasonable basis or support for his projection. 

24. Breland and Fletcher also took steps to mask the false 2018 

projection. They increased the stated number of customers for 2016 and 2017. 

Those inflated numbers were presented to SBC as actual amounts provided for 

historical purposes in an attempt to smooth out the year-to-year trend of sewer 

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customers so that Fletcher’s extremely high 2018 sewer customer projection would 

appear more realistic. For example, Fletcher’s financial projections in the SBC 

application represented that the Town had 1,574 sewer customers for 2016. The 

Town’s December 2016 sewer records (the last full month prior to SBC application 

date of January 2017) showed that the Town actually billed only 960 sewer 

customers.

25. Fletcher (and Twin Spires through Fletcher),and Breland were aware 

of the actual historical sewer customer numbers because the Town’s sewer clerk 

repeatedly provided them with the actual number of customers and provided them 

with reports showing the accurate number of customers. Breland participated in, 

reviewed and approved Fletcher’s projections, which both Fletcher and Breland 

knew were false. 

26. On February 16, 2017, the SBC approved the Town’s 2017 bond 

offering. The SBC relies on the municipal issuer and its professionals to provide 

accurate and complete information. The SBC was not aware that the DSCR was 

based on false and misleading projections and had it been so aware, it would not 

have approved the issuance of the 2017 Bonds. 

27. In a private placement on April 27, 2017, the Town sold the 2017 

Bonds to two banks and a state lending authority; the total issuance was $4 million. 

Twin Spires was paid $18,000 in advisory fees from the 2017 Bond offering. 

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28. On July 18, 2018, the Town submitted another SBC application based 

on similar projections for approval of the 2018 Bonds ($1.8 million Wastewater, 

Water and Sewer Treatment Utilities Revenue Bonds) to refund a 2015 bond 

issuance. The 2015 Bonds that were to be refunded were Series A and B, Water 

Treatment and Utilities Revenue Bond ($500,000) and Wastewater and Sewer 

Treatment Utilities Revenue Bond ($1.2M) (“2015 Bonds”).

29. The SBC application for the 2018 Bonds was initially prepared by 

Twin Spires and Fletcher. As with the 2017 application, the 2018 application was 

reviewed and approved by Breland. Twin Spires, Fletcher and Breland were aware 

that the 2018 application included an overstated sewer system revenue projection 

similar to the application for the 2017 Bonds. 

30. Twin Spires, Fletcher and Breland were aware that the 2018 

application fraudulently projected, among other items, that Sterlington would have 

2,204 sewer customers for 2019 (now the relevant year for the DSCR calculation). 

This amount, without any support or justification for the increase, was significantly 

higher than the Town’s 1,076 actual sewer customers as of June 30, 2018. 

31. The false and misleading projection caused the Town to overstate its 

2019 projected sewer system revenue. The false projection resulted in a DSCR of 

1.1, over the 1.0 necessary for SBC approval. Without the overstated sewer 

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revenue, the DSCR would have been well below 1.0, and the bond issuance would 

not have received the necessary SBC approval. 

 32. On August 16, 2018, the SBC approved the bond offering. On 

September 28, 2018, the Town privately placed the 2018 Bonds with a single bank 

investor. Twin Spires was paid $8,303 in advisory fees from the 2018 Bond 

offering. 

Defendants, Breland and Sterlington Did Not Disclose that the SBC 

Approvals Were Based on Fraudulently Overstated Sewer Revenue

Projections

 33. In connection with the sale of the 2017 Bonds and the 2018 Bonds, 

each of the investors were informed that Sterlington had, as required by law, 

obtained SBC approval prior to issuing the Bonds. As part of their process for 

soliciting investors to purchase the 2017 Bonds, Breland, through Twin Spires and 

Fletcher, sent one of the 2017 Bond investors a copy of the SBC application, which 

had been submitted by the Town for the 2017 Bonds. And , in connection with 

soliciting investor interest in the 2018 Bonds, Breland, through Twin Spires and 

Fletcher, sent the 2018 Bond investor a copy of the 2018 Bond SBC application 

and affirmatively told the 2018 Bond investor in an email that the “refunding was 

approved by Bond Commission.” 

 34. In addition, at the closings for both offerings, the Town provided each 

investor with a copy of the SBC approval certificate, representing that the SBC had 

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approved the Bonds. For the 2017 Bonds, Breland also provided a certification 

that the Bonds were “authorized by and issued in conformity with the requirements 

of the Constitution and statutes of the State of Louisiana.” 

 35. These communications and representation to investors about SBC 

application and SBC approval were misleading because investors were not 

informed that the SBC applications contained false information and that the SBC 

approvals had been obtained based on fraudulently overstated sewer revenue 

projections. 

Neither Twin Spires nor Fletcher were Registered

as a Municipal Advisor as Required

36. During the relevant time period, Twin Spires, through Fletcher, 

provided advice to Sterlington regarding the issuance of municipal securities 

(specifically, the 2017 Bonds and 2018 Bonds). 

37. Twin Spires and Fletcher specifically advised the Town regarding: 

the development of a financing plan for improving the sewer system and acquiring 

and improving the water system; the structure, timing and terms for both the 2017

Bonds and the 2018 Bonds; the preparation of financial projections on behalf of the 

Town to the SBC for its authorization for the 2017 Bonds and 2018 Bonds; and the 

negotiation of financing terms with the investors in both the 2017 Bonds and 2018 

Bonds.

38. Twin Spires failed to register with the Commission as a municipal 

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advisor as required. 

FIRST CLAIM FOR RELIEF

Fraud in the Offer or Sale of Securities 

Sections 17(a)(1) and 17(a)(3) of the Securities Act 

39. The SEC incorporates the allegations in paragraphs 1 through 38 as if 

fully set forth herein.

40. By engaging in the acts and conduct alleged herein, Defendants, 

directly or indirectly, in the offer or sale of securities, by the use of any means or 

instruments of transportation or communication in interstate commerce or by use of 

the mails, have:

a. knowingly or with severe recklessness employed a device, 

scheme, or artifice to defraud; and

b. knowingly, recklessly, or negligently engaged in a transaction, 

practice, or course of business which operated or would operate as a fraud or deceit 

upon the purchaser.

41. Defendants violated and, unless restrained and enjoined, will continue 

to violate Sections 17(a)(1) and 17(a)(3) of the Securities Act [15 U.S.C. § 77q(a)(1) 

and (3)]. 

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SECOND CLAIM FOR RELIEF

Fraud in Connection with the Purchase or Sale of Securities 

Section 10(b) of the Exchange Act and Rule 10b-5 thereunder 

42. The SEC incorporates the allegations in paragraphs 1 through 38 as if 

fully set forth herein.

43. By engaging in the acts and conduct alleged herein, Defendants, 

directly or indirectly, in connection with the purchase or sale of securities, by the 

use of any means or instrumentality of interstate commerce, or of the mails or of 

any facility of any national securities exchange:

a. employed a device, scheme, or artifice to defraud;

b. made untrue statements of material facts or omitted to state 

material facts necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and,

c. engaged in an act, practice, or course of business which 

operated or would operate as a fraud or deceit upon any person.

44. Defendants knowingly, intentionally, and/or recklessly engaged in the 

aforementioned devices, schemes and artifices to defraud, made untrue statements of 

material facts and omitted to state material facts, and engaged in fraudulent acts, 

practices and courses of business. In engaging in such conduct, the defendants acted

with scienter, that is, with an intent to deceive, manipulate or defraud or with a severe 

reckless disregard for thetruth.

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45. Defendants violated and, unless restrained and enjoined, will continue 

to violate Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5].

THIRD CLAIM FOR RELIEF

Violations of Section 15B(c)(1) of the Exchange Act by Twin Spires and 

Fletcher

(Breach of Fiduciary Duty)

46. Paragraphs 1 through 38 are hereby re-alleged and are incorporated 

herein by reference. 

47. Pursuant to Section 15B(c)(1) of the Exchange Act, a municipal advisor 

and any person associated with a municipal advisor shall be deemed to have a 

fiduciary duty to any municipal entity for whom the municipal advisor acts as a 

municipal advisor, and no municipal advisor may engage in an act, practice or course 

of business that is not consistent with a municipal advisor’s fiduciary duty.

48. By engaging in the conduct alleged above, Defendant Twin Spires acted 

as a municipal advisor and Defendant Fletcher acted as a municipal advisor and 

person associated with a municipal advisor, as those terms are defined in Sections 

15B(e)(4)(A) and 15B(e)(7) of the Exchange Act [15 U.S.C. §§ 78o-4(e)(4) and (7)]. 

As such, Twin Spires and Fletcher owed a fiduciary duty to Sterlington. 

49. Defendants engaged in the acts, practices and courses of business 

described above, and breached their fiduciary duty to Sterlington.

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50. By reason of the foregoing, Defendants violated and, unless enjoined 

will continue to violate, Section 15B(c)(1) of the Exchange Act [15 U.S.C. § 78o4(c)(1)].

FOURTH CLAIM FOR RELIEF

Violations of Section 15B(a)(1)(B) of the Exchange Act by Twin Spires

(Failure to Register as a Municipal Advisor with the Commission)

51. The SEC incorporates the allegations in paragraphs 1 through 38 as if 

fully set forth herein.

52. Defendant Twin Spires provided advice to or on behalf of a 

municipal entity or obligated person with respect to the issuance of municipal 

securities without first being registered with the Commission as a municipal 

advisor.

53. By reason of the foregoing, Defendant Twin Spires violated and, 

unless enjoined will continue to violate, Section 15B(a)(1)(B) of the Exchange Act 

[15 U.S.C. § 78o-4(a)(1)(B)].

FIFTH CLAIM FOR RELIEF

Violations of MSRB Rule G-17 by Fletcher and Twin Spires

(Engaging in a Deceptive, Dishonest, or Unfair Practice)

54. The SEC incorporates the allegations in paragraphs 1 through 38 as if 

fully set forth herein.

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55. Defendants Fletcher and Twin Spires, in the conduct of their 

municipal securities or municipal advisory activities, failed to deal fairly with all 

persons and engaged in a deceptive, dishonest, or unfair practice or practices.

56. By reason of the forgoing, Defendants Fletcher and Twin Spires 

violated and, unless enjoined will continue to violate, MSRB Rule G-17.

SIXTH CLAIM FOR RELIEF

Violations of MSRB Rule G-42 by Twin Spires and Fletcher

(Breaches of Duties of Non-Solicitor Municipal Advisors)

57. The SEC incorporates the allegations in paragraphs 1 through 38 as if 

fully set forth herein.

58. Defendants (i) breached their fiduciary duty, duty of loyalty, or duty 

of care to their municipal entity client; (ii) made material misrepresentations and 

omissions to the SBC on behalf of their client to obtain approval of the client’s 

municipal bond issuances in 2017 and 2018; and, (iii) made material 

misrepresentations and omissions to bond investors pertaining to the overstated 

financial projections they submitted to the SBC to obtain its approval for the 

proper issuance of their client’s 2017 and 2018 bonds in private placement 

transactions as to which Defendants provided advice.

59. By reason of the forgoing, Defendants violated and, unless enjoined 

will continue to violate, MSRB Rule G-42.

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SEVENTH CLAIM FOR RELIEF

Violations of Section 15B(c)(1) of the Exchange Act by Defendants

(Acts in Contravention of Any Rule of the MSRB)

60. The SEC incorporates the allegations in paragraphs 1 through 38 as if 

fully set forth herein.

61. Defendants violated MSRB Rules G-17 and G-42.

62. Defendants acted in contravention of a rule or rules of the MSRB 

while making use of the mails or any means or instrumentality of interstate 

commerce to provide advice to or on behalf of a municipal entity or obligated 

person with respect to municipal financial products or the issuance of municipal 

securities.

63. By reason of the forgoing, Defendants violated and, unless enjoined 

will continue to violate, Section 15B(c)(1) of the Exchange Act [15 U.S.C. § 78o4(c)(1)].

EIGHTH CLAIM FOR RELIEF

Aiding and Abetting Liability Against Fletcher for 

Twin Spires’ Violation of Section 15B(a)(1)(B)

64. The SEC incorporates the allegations in paragraphs 1 through 38 as if 

fully set forth herein.

65. By reason of the foregoing, Twin Spires acted as a municipal adviser 

without registration and violated Section 15B(a)(1)(B) of the Exchange Act.

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66. Fletcher was aware of, or recklessly disregarded, that Twin Spires’ 

conduct was improper and rendered Twin Spires substantial assistance in this 

conduct.

67. By reason of the foregoing, Fletcher aided and abetted and, unless 

enjoined will continue to aid and abet, violations of Section 15B(a)(1)(B) of the 

Exchange Act [15 U.S.C. § 78o-4(a)(1)(B)].

NINTH CLAIM FOR RELIEF

Aiding and Abetting Liability Against Fletcher and 

Twin Spires for Sterlington’s Violation of Section 17(a)(2)

68. The SEC incorporates the allegations in paragraphs 1 through 38 as if 

fully set forth herein.

69. By the above described conduct, Sterlington, in the offer and sale of 

securities described herein, by use of means and instruments of transportation and 

communication in interstate commerce and by use of the mails, directly and 

indirectly, obtained money and property by means of untrue statements of material 

fact and omissions to state material facts necessary in order to make the statements 

made, in light of the circumstances under which they were made, not misleading.

70. By reason of the foregoing, Sterlington violated Section 17(a)(2) of 

the Exchange Act.

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71. Fletcher and Twin Spires were aware of, or recklessly disregarded, 

that Sterlington’s conduct was improper and rendered Sterlington substantial 

assistance in this conduct.

72. By reason of the foregoing, Fletcher and Twin Spires aided and 

abetted and, unless enjoined will continue to aid and abet, violations of Section 

17(a)(2) of the Exchange Act [15 U.S.C. §77q(a)(2)]. 

RELIEF REQUESTED

WHEREFORE, the SEC respectfully requests that this Court enter a 

judgment:

I.

Permanently enjoining, pursuant to Rule 65(d) of the Federal Rules of Civil 

Procedure, the Defendants from violating, directly or indirectly, Section 17(a) of 

the Securities Act [15 U.S.C. § 77q(a)]; Sections 10(b) [15 U.S.C. § 78j(b)], 

15B(a)(1)(B) [15 U.S.C. § 78o-4(a)(1)(B)] and 15B(c)(1) [15 U.S.C. § 78o-4(c)(1)] 

of the Exchange Act and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; and, 

Municipal Rulemaking Board Rules G-17 and G-42. 

II.

Ordering Defendants, jointly and severally, to pay disgorgement plus 

prejudgment interest pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 

78u(d)(5). 

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III. 

Ordering Defendants, jointly and severally, to pay a civil penalty pursuant to 

Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the 

Exchange Act [15 U.S.C. § 78u(d)(3)].

IV.

Retaining jurisdiction over this action to implement and carry out the terms of 

all orders and decrees that may be entered, or to entertain any suitable application or 

motion for additional relief within the jurisdiction of this Court.

V.

Granting such other and further relief as this Court deems just and appropriate.

Dated: June 2, 2022. 

 Respectfully submitted,

 /s/William P. Hicks

 William P. Hicks 

 Senior Trial Counsel

Georgia Bar No. 351649 

 hicksw@sec.gov

 M. Graham Loomis 

Regional Trial Counsel 

 Georgia Bar No. 457868 

 loomism@sec.gov

United States Securities and Exchange Commission

950 E. Paces Ferry Road NE

Suite 900

Atlanta, GA 30326

404-842-7600

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