FINRA

FINRA RULE 2010, NASD RULE 2110 - TODD HORLBECK CREATED A HEDGE FUND WHICH ACCEPTED ONLY ACCREDITED INVESTORS WHO WERE REQUIRED TO MAKE A $250,000 INITIAL INVESTMENT AND COMPLETE A SUBSCRIPTION AGREEMENT BEFORE TRANSFERRING FUNDS TO THE HEDGE FUND ACCOUNT AT HORLBECK'S MEMBER FIRM. THE HEDGE FUND PRODUCED QUARTERLY ACCOUNT STATEMENTS FOR EACH INVESTOR THAT REPORTED THE NET ASSET VALUE (NAV) OF THE FUND AS WELL AS THE VALUATION OF EACH INDIVIDUAL'S INVESTMENT IN THE HEDGE FUND; THESE STATEMENTS WERE PREPARED AND DISTRIBUTED BY HORLBECK. THE VALUE OF THE HEDGE FUND DECREASED AS THE VALUE OF THE INVESTMENTS HELD DROPPED. DURING THIS PERIOD, HORLBECK MISSTATED THE NAV OF THE HOLDINGS AND THE VALUE OF EACH INVESTOR'S HOLDINGS. HORLBECK UNDERSTATED THE LOSSES OF THE FUND ON APPROXIMATELY FOUR QUARTERLY ACCOUNT STATEMENTS SENT TO INVESTORS. THE HEDGE FUND INVESTORS WERE RESTRICTED TO ONE WITHDRAWAL PER YEAR; WHEN SOME INVESTORS TOOK DISTRIBUTIONS, HORLBECK APPROVED DISTRIBUTIONS BASED ON THE INCORRECT VALUE OF THE FUND. HORLBECK HAS PAID AND/OR HAS MADE ARRANGEMENTS TO PAY THOSE REMAINING INVESTORS WHO DID NOT TAKE DISTRIBUTIONS TO MAKE THEM WHOLE.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

Indefinite

12/15/2011

WITHOUT ADMITTING OR DENYING THE FINDINGS, HORLBECK CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS; THEREFORE, HE IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY.