Arlington Capital Management, Inc.

Allegations: THE SEC DETERMINED THAT FROM AT LEAST 2012 TO 2015 ARLINGTON CAPITAL MANAGEMENT ("ACM") IMPROPERLY ADVERTISED BACK-TESTED PERFORMANCE RESULTS OF ITS MODEL PORTFOLIOS WITHOUT PROPERLY DISCLOSING THE FACT THAT THE MODELS WERE BACK-TESTED OR THAT CHANGES TO THE MODEL HAD BEEN APPLIED RETROACTIVELY. THE SEC ALSO DETERMINED THAT ACM FAILED TO ADOPT POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE INVESTMENT ADVISERS ACT OF 1940, AND THAT MR. LOPRESTI WAS RESPONSIBLE FOR ACM'S ADVERTISING AND, AS ACM'S CHIEF COMPLIANCE OFFICER ("CCO"), ITS POLICIES AS PROCEDURES. Status: Final Sanction Detail: N/A Summary: ACM AND MR. LOPRESTI AGREED TO SETTLE THE PROCEEDINGS WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS. TO SETTLE THESE PROCEEDINGS, ACM AND MR. LOPRESTI WERE ORDERED TO CEASE AND DESIST FROM COMMITTING AND CAUSING FUTURE VIOLATIONS AND WERE CENSURED. ACM AND MR. LOPRESTI AGREED TO PAY CIVIL PENALTIES OF $125,000 AND $75,000, RESPECTIVELY. IN ADDITION, ACM AGREED TO DISCLOSE THIS MATTER ON ITS WEBSITE AND ITS DISCLOSURE BROCHURE, AND TO NOTIFY CLIENTS OF THIS MATTER. FOR A PERIOD OF SIX MONTHS FROM THE DATE OF THE ORDER, THESE DISCLOSURES WILL INCLUDE AN ENTIRE SECTION OF THE ORDER AND/OR A HYPERLINK TO THE ORDER (HTTPS://WWW.SEC.GOV/LITIGATION/ADMIN/2018/IA-4885.PDF). ACM ALSO AGREED TO CONTINUE TO USE A COMPLIANCE CONSULTANT TO PROVIDE CERTAIN REQUIRED REPORTS AND RECOMMENDATIONS.