Goelzer Investment Management, Inc.

Allegations: THIS ACTION INVOLVES DISCLOSURE AND COMPLIANCE FAILURES RELATED TO AN INVESTMENT ADVISER'S USE OF ITSELF AS BROKER TO EXECUTE CLIENT TRADES. THESE COMPLIANCE FAILURES INCLUDE, LACK OF BEST EXECUTION ANALYSIS CONSISTENT WITH ITS STATEMENTS IN ITS FORM ADV PART II AND PART 2A. GIM MISREPRESENTED IN ITS FORM ADV PART II THAT CLIENTS WHO USED GIM AS THEIR BROKER STOOD TO BENEFIT FROM LOWER COMMISSION COSTS AS A RESULT OF GIM'S AGGREGATION OF THEIR TRADES, WHEN NO SUCH BENEFIT WAS PROVIDED. GIM FAILED TO DISCLOSE IN ITS FORM ADV PART II THAT ITS ADVISORY FEES WERE NEGOTIABLE, AS REQUIRED BY THE FORM. Status: Final Sanction Detail: IN ANTICIPATION OF THE INSTITUTION OF THESE PROCEEDINGS, GIM SUBMITTED AN OFFER OF SETTLEMENT, WHICH THE SEC ACCEPTED. WITHOUT ADMITTING OR DENYING THE FINDINGS, EXCEPT AS TO THE COMMISSION'S JURISDICTION OVER GIM AND THE SUBJECT MATTER, GIM CONSENTED TO THE ENTRY OF THE ORDER. GIM SHALL PAY WITHIN 10 DAYS OF THE ENTRY OF THE ORDER A CIVIL PENALTY OF $100,000 AND PREJUDGEMENT INTEREST OF $53,799. GIM MUST ALSO PAY $309,994 IN DISGORGEMENT TO CLIENTS. GIM IS RESPONSIBLE FOR MAINTAINING AN ESCROW ACCOUNT AS A DISGORGEMENT FUND, WITH FUNDS TO BE PAID TO CLIENTS AND FORMER CLIENTS WITHIN 60 DAYS OF THE ENTRY OF THE ORDER. GREGORY GOELZER, AS CHIEF COMPLIANCE OFFICER, WAS ORDERED TO PAY A CIVIL PENALTY OF $35,000 WITHIN 10 DAYS OF THE ORDER. Summary: GIM HAS PAID THE CIVIL PENALTY AND PREJUDGEMENT INTEREST. GIM HAS COMPLETED PAYMENT OF THE DISGORGEMENT FUNDS. GREGORY GOELZER HAS PAID HIS CIVIL PENALTY.