Municipal-securities advisor takes his jury trial fight to a federal appeals court
On September 17, the U.S. Court of Appeals for the Tenth Circuit heard oral arguments in Choice Advisors, LLC, and Matthias O’Meara v. Securities and Exchange Commission—a case that will help decide whether the SEC can strip Americans of their right to make a living through its own in-house courts.
PLF senior attorney Oliver Dunford argued before the court on O’Meara’s behalf.
How O’Meara ended up here
Matthias O’Meara founded Choice Advisors to help charter schools raise money by issuing bonds. His first two clients completed successful financings—both later stated the deals couldn’t have happened without him. None of his investors lost money, and no client complained.
The SEC sued anyway, alleging O’Meara and Choice Advisors had advised those clients before finishing their registration paperwork as municipal-securities advisors. A federal court in California agreed, ordering disgorgement and civil penalties.
The SEC then decided to open a second proceeding, this time in its own in-house tribunal, seeking an industry ban for O’Meara—a so-called “career death penalty”—and a censure of Choice Advisors.
What the Constitution requires
O’Meara and Choice Advisors, represented by PLF, sued to stop the SEC’s in-house proceeding, arguing it violates the Constitution’s promises of an independent court and jury. That fight is now before the Tenth Circuit.
The Supreme Court already weighed in on a similar case in 2024. In SEC v. Jarkesy, the Court held that when the SEC alleges securities-laws violations and seeks civil penalties, defendants are entitled to a jury trial. O’Meara’s case tests how far that ruling reaches.
The Constitution requires an independent court when the government tries to restrict a private right such as the right to earn a living. The Constitution treats public rights—entitlements granted by the government, like Social Security benefits or veterans claims—differently because they exist in connection with a government program, not as fundamental rights that exist independently of it. The distinction comes down to government conferring a benefit versus government restricting what a citizen may do.
Through its in-house proceeding, the SEC seeks to restrict O’Meara’s right to make a living—a question of private right that must be adjudicated in an independent court.
Oral argument and what comes next
The main focus of oral argument was whether the SEC should be required to seek the “career death penalty” in an independent court. That issue turns on the nature of the SEC’s claim and the remedy it seeks. For O’Meara, Dunford argued that the SEC’s requested penalty is based on violations of federal securities laws and that the lifetime industry ban is an equitable remedy. According to Dunford, the court should apply the U.S. Supreme Court’s ruling in SEC v. Jarkesy, which held that violations of federal securities laws involve private rights. Further, an industry ban is an equitable remedy. Therefore, Dunford argued, the SEC’s action belongs in federal court.
The SEC responded with a muddled argument. It acknowledges that its request for a lifetime ban is based on securities-laws violations (found by the federal court in California), but it also claims that its administrative proceeding is an entirely new and separate action.
It seems likely that the Tenth Circuit’s decision on this issue will turn on whether it agrees that the right to earn a living—and the potential revocation of a professional license—involves private rights.
Other arguments were also discussed. The panel questioned the district court’s decision not to address whether the Seventh Amendment protects O’Meara’s right to a jury trial. If the Tenth Circuit reverses on that issue, O’Meara will have to return to the district court to make his case for a jury.
“The SEC already got its day in court,” Dunford said after the argument. “What it wants now is a second bite at the apple in a forum it controls for a penalty that would end O’Meara’s career. The SEC should have asked the federal court in its previous action. It should not be allowed to split its claims and use a friendly venue to impose a career death penalty.”
A ruling is expected within a few months.
