Horter Investment Management, Llc

Allegations: THE SEC HAS ALLEGED THAT HORTER INVESTMENT MANAGEMENT AND DREW HORTER FAILED TO REASONABLY SUPERVISE FORMER INVESTMENT ADVISER REPRESENTATIVE KIMM HANNAN AND FAILED TO REASONABLY ADOPT AND IMPLEMENT POLICIES AND PROCEDURES DESIGNED TO SAFEGUARD CLIENT ASSETS AGAINST MISAPPROPRIATION BY MR. HANNAN AND TO IMPLEMENT POLICIES AND PROCEDURES IT HAD ADOPTED. Status: On Appeal Sanction Detail: DREW K HORTER WAS BARRED FROM ASSOCIATING IN A SUPERVISORY CAPACITY WITH ANY BROKER, DEALER, INVESTMENT ADVISER, MUNICIPAL SECURITIES DEALER, MUNICIPAL ADVISOR, TRANSFER AGENT, OR NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION, WITH THE RIGHT TO REAPPLY AFTER A PERIOD OF TWO YEARS. THE INITIAL DECISION FROM MARCH 20, 2023, WAS APPEALED AND A FINAL DECISION, INCLUDING START DATE, HAVE NOT YET BEEN ESTABLISHED. Summary: IN CONNECTION WITH AN OFFER OF SETTLEMENT DATED NOVEMBER 3, 2022 THE COMMISSION IMPOSED A CEASE & DESIST ORDER AGAINST AGAINST HORTER INVESTMENT MANAGEMENT AND DREW HORTER FOR VARIOUS VIOLATIONS OF THE INVESTMENT ADVISORS ACT OF 1940. THE ORDER REQUIRED CONTINUED PROCEEDINGS TO DETERMINE WHAT, IF ANY, CIVIL PENALTIES OR OTHER REMEDIAL ACTIONS ARE APPROPRIATE AND IN THE PUBLIC INTEREST. THOSE CONTINUED PROCEEDINGS REMAIN ONGOING. FOLLOWING THOSE CONTINUED PROCEEDINGS, ON MARCH 20, 2023, THE ADMINISTRATIVE LAW JUDGE ("ALJ") ASSIGNED TO THE CASE ISSUED HER INITIAL DECISION IMPOSING CIVIL MONEY PENALTIES AND CENSURING HORTER INVESTMENT AND MR. HORTER, AND IMPOSING A SUPERVISORY COLLATERAL BAR AGAINST MR. HORTER WITH THE RIGHT TO REAPPLY AFTER 2 YEARS. ON APRIL 10, 2023, HORTER INVESTMENT AND MR. HORTER FILED A PETITION TO REVIEW THE ALJ'S INITIAL DECISION ("APPEAL") BY THE SEC COMMISSIONERS. ON MAY 1, 2023, THE COMMISSION GRANTED THE PETITION TO REVIEW THE ALJ'S INITIAL DECISION. BRIEFING ON THE APPEAL WAS COMPLETED IN JULY 2023. THE APPEAL REMAINS PENDING AND THE ALJ'S INITIAL DECISION HAS NOT BEEN FINALLY ADOPTED BY THE COMMISSION.

Allegations: IN A DECEMBER 2014 SETTLEMENT WITH THE SEC, F-SQUARED INVESTMENTS, AN UNAFFILIATED FORMER SIGNAL PROVIDER TO HORTER INVESTMENT MANAGEMENT, ADMITTED THAT IT HAD VIOLATED FEDERAL SECURITIES LAWS RELATED TO INACCURATE PERFORMANCE INFORMATION FOR THE PERIOD APRIL 2001 THROUGH SEPTEMBER 2008. THE SEC CONDUCTED A SWEEP OF INVESTMENT ADVISERS THAT HAD RELIED ON F-SQUARED'S INACCURATE PERFORMANCE INFORMATION WHICH INCLUDED HORTER INVESTMENT MANAGEMENT. IN THE SETTLEMENT ORDER, WHICH HORTER NEITHER ADMITTED OR DENIED, THE SEC ANNOUNCED HORTER VIOLATED SECTIONS 204(A), 206(2) AND 206(4) OF THE ADVISERS ACT AND RULES 204(A)(16), 206(4)-1(A)(5) AND 206(4)-7 THEREUNDER, BY DISTRIBUTING TO CLIENTS AND PROSPECTIVE CLIENTS PERFORMANCE ADVERTISING MATERIALS PROVIDED BY F-SQUARED WHICH CONTAINED FALSE OR MISLEADING INFORMATION, FAILING TO ADOPT WRITTEN POLICIES AND PROCEDURES REASONABLY DESIGNED TO PREVENT VIOLATIONS OF THE ADVISERS ACT AND FAILING TO MAINTAIN RECORDS SUBSTANTIATING THE PERFORMANCE IN THE ADVERTISEMENTS CREATED BY F-SQUARED. Status: Final Sanction Detail: $778,804 LEVIED AGAINST HORTER INVESTMENT MANAGMENT INCLUDES $482,595 DISGORGEMENT, $46,209 PREJUDGMENT INTEREST AND $250,000 PENALTY Summary: $194,701 DUE WITHIN 10 DAYS OF THE ENTRY OF THE ORDER AND $584,103 TO BE PAID IN 3 INSTALLMENTS OF $194,701 WITHIN 180 DAYS, 270 DAYS AND 360 DAYS OF THE ENTRY OF THE ORDER.