UNITED STATES SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Sections 203(e), 203(f), and 203(k) of the Investment Advisers Act of 1940 ("Advisers Act") against Horter Investment Management, LLC and Drew K. Horter (individually "Horter Investment" and "Horter," collectively "Respondents"). The Commission alleges that Horter Investment, a registered investment adviser, and Drew Horter, Horter Investment's founder and CEO, failed reasonably to supervise Kimm Hannan, an Investment Adviser Representative ("IAR") with Horter Investment. From at least November 2015 through at least March 2017, Hannan misappropriated $728,001 from Horter Investment clients purportedly for his outside business activities ("OBA"), but instead he used those funds to gamble, pay personal expenses, and repay other investors. Horter Investment's overall supervisory structure was inadequate to reasonably supervise its IARs generally and Hannan specifically. Horter Investment failed to establish supervisory policies and procedures and failed to follow those policies and procedures it had in place. Horter Investment also failed reasonably to follow up on red flags. Similarly, Horter, who had overall supervisory responsibility for Horter Investment, failed to follow specific policies and procedures, failed reasonably to supervise Hannan, made open-ended delegations of supervisory responsibility without following up, and failed reasonably to follow up on red flags. Horter Investment and Horter failed to reasonably supervise Hannan within the meaning of Sections 203(e)(6) and 203(f) of the Advisers Act and Horter Investment willfully violated Section 206(4) of the Advisers Act, and Rule 206(4)-7 thereunder, by failing reasonably both to adopt policies and procedures designed to safeguard client assets against misappropriation by Hannan and also to implement policies and procedures it had adopted. In view of the allegations, the Commission deems it necessary and appropriate in the public interest that public administrative proceedings be instituted to determine: Whether the allegations set forth hereof are true and, in connection therewith, to afford Respondents Horter Investment and Horter an opportunity to establish any defenses to such allegations; and What, if any, remedial action is appropriate in the public interest against Respondents Horter Investment and Horter pursuant to Section 203(f) of the Advisers Act including, but not limited to, civil penalties pursuant to Section 203 of the Advisers Act.

Order

Civil and Administrative Penalty(ies)/Fine(s)

$50,000.00

Suspension

Association in a supervisory capacity with any broker, dealer, IA, Muni securities dealer, Muni advisor, transfer agent, NRSRO

Six months

10/28/2024

4/27/2025

FAILURE TO USE DUE DILIGENCE TO PERFORM REASONABLE INVESTIGATION INTO CITI-USA PARTNERS AND THE VALUE OF LIMITED PARTNERSHIP INTEREST SOLD TO PLAINTIFFS. EMPLOYING FIRM: TITAN VALUE EQUITIES GROUP---

$20,000.00

RELIEF REQUEST WITHDRAWN. CASE SETTLED. THE AMOUNT OF $20,000.00 TO BE PAID BY MR HORTER OVER 2 YEARS (1998 & 1999) TITAL VALUE EQUITIES WAS THE BROKER DEALER WHO PERFORMED THE DUE DILIGENCE FOR CITI-USA PARTNERS. EACH CLIENT EXCEEDED SUITABILITY PER THE MEMORANDUM. THE GENERAL PARTNER EMBEZZLED CASH FROM THE PARTNERSHIP. THE PROPERTY WAS NEVER PURCHASED, THUS, THE TAX CREDITS WERE DENIED BY THE IRS. CLIMANTS AGREED TO RELEASE RESPOONDENTS. ON JULY 14, 1997, THE CLIMANTS DISMISSED THEIR ARBITRATION CLAIMS WITH RESPECT TO MR HORTER. NOTE: ALL CLAIMANTS [CUSTOMER], [THIRD PARTY] & [THIRD PARTY] WERE PARTIES ET AL IN ARBITRATION 96-02819 THAT WAS SETTLED.

FAILURE TO USE DUE DILIGENCE TO PERFORM REASONABLE INVESTIGATION INTO CITI-USA PARTNERS AND THE VALUE OF LIMITED PARTNERSIP INTEREST SOLD TO PLAINTIFFS. EMPLOYING FIRM: TITAN VALUE EQUITIES GROUP

$20,000.00

$20,000.00

RELIEF REQUEST WITHDRAWN. CASE SETTLED. THE AMOUNT OF $20,000.00 TO BE PAID BY MR HORTER OVER 2 YEARS (1998 & 1999) TITAN VALUE EQUITIES WAS THE BROKER DEALER WHO PERFORMED THE UE DILIGENCE FOR CITI USA PARTNERS. EACH CLIENT EXCEEDED SUITABILITY PER THE MEMORANDUM. THE GENERAL PARTNER EMBEZZLED CASH FROM THE PARTNERSHIP. THE PROPERTY WAS NEVER PURCHASED, THUS, THE TAX CREDITS WERE DENIED BY THE IRS. CLIMANTS AGREED TO RELEASE RESPONDENTS. ON JULY 14, 1997, THE CLIMANTS DISMISSED THEIR ARBITRATION CLAIMS WITH RESPECT TO MR HORTER. NOTE: ALL CLAIMANS [CUSTOMER], [OTHER CUSTOMER NAMED] & [OTHER CUSTOMER NAMED] WERE PARTIES ET ALL IN ARBITRATION 96-02819 THAT WAS SETTLED.