Fraudulent Sale of Security.

Changed Plea to Guilty for 1 Count on Oct. 6, 2016.

Theft.

Pled guilty

Unregistered Sale of a Security.

Pled guilty to 1 Count per Plea Agreement on Oct. 6, 2016.

FINRA

FINRA BY-LAWS ARTICLE V, SECTION 2, NASD BY-LAWS ARTICLE V, SECTION 2, FINRA RULES 1122, 2010, 8210, NASD RULES 2110 AND INTERPRETATIVE MATERIAL-1000-1: HORVATH MISAPPROPRIATED $1,000 FROM A MUTUAL FUND WHOLESALER THAT WAS INTENDED TO GO TO HIS MEMBER FIRM. HORVATH, WHILE AT HIS FIRM, OPERATED HIS SECURITIES AND INSURANCE BUSINESSES. HORVATH ORGANIZED A RIVERBOAT BOAT CRUISE INVESTMENT SEMINAR AND HE INVITED A WHOLESALER WITH A MUTUAL FUND DISTRIBUTION COMPANY, TO GIVE A PRESENTATION AND CO-SPONSOR THE EVENT. THE WHOLESALER GAVE HORVATH A PERSONAL CHECK FOR $1,000 MADE OUT TO HORVATH'S FIRM AND DATED A CERTAIN DATE. THE CHECK REPRESENTED PAYMENT TO HORVATH'S FIRM FOR THE WHOLESALER'S SPONSORSHIP OF THE RIVERBOAT CRUISE EVENT. HORVATH ALTERED THE CHECK TO MAKE IT PAYABLE TO HIM, AND ADDED REIMBURSEMENT BOAT EVENT ON THE FACE OF THE CHECK. HORVATH ENDORSED THE CHECK TO READ, FOR DEPOSIT ONLY WITH HIS FIRM'S NAME AND THE NAME OF HIS SECURITIES AND INSURANCE BUSINESSES AND DEPOSITED THE CHECK INTO HIS BUSINESS CHECKING. HORVATH CONVERTED THE FUNDS TO HIS OWN USE BY DEPOSITING THE CHECK INTO A BANK ACCOUNT HE CONTROLLED. HORVATH NEVER REPAID THE $1,000 TO HIS FIRM OR THE WHOLESALER. HORVATH'S FIRM RECOUPED THE FUNDS BY DEDUCTING $1,000 FROM HIS PAYCHECK. THE WHOLESALER RETRIEVED A COPY OF HIS CANCELLED CHECK THROUGH HIS BANK'S WEBSITE SO HE COULD RECEIVE REIMBURSEMENT FROM HIS EMPLOYER, THE MUTUAL FUND DISTRIBUTOR. AT THIS TIME, THE WHOLESALER NOTICED THAT THE PAYEE HAD BEEN ALTERED FROM HORVATH'S FIRM TO HORVATH'S BUSINESSES. THE WHOLESALER HAD RETAINED A COPY OF HIS ORIGINAL CHECK AND PROVIDED COPIES OF THE ORIGINAL AND ALTERED CHECKS TO HIS FIRM'S COMPLIANCE DEPARTMENT. THE MUTUAL FUND DISTRIBUTOR, IN TURN, PROVIDED COPIES OF THE ORIGINAL AND ALTERED CHECKS TO HORVATH'S FIRM. THE FIRM TERMINATED HORVATH'S EMPLOYMENT IN VIOLATING ITS POLICIES AND PROCEDURES CONCERNING REIMBURSEMENTS, AND FOR ALTERING A WHOLESALER'S CHECK. HORVATH FAILED TO DISCLOSE MATERIAL INFORMATION ON HIS FORM U4 WHILE ASSOCIATED WITH A FIRM, AND ONLY DISCLOSED IT UPON HIS AFFILIATION WITH ANOTHER FIRM. WHILE HORVATH WAS ASSOCIATED WITH THE SECOND FIRM, HORVATH FAILED TO DISCLOSE ADDITIONAL MATERIAL INFORMATION ON HIS FORM U4. HORVATH FAILED TO PROVIDE TESTIMONY AS REQUESTED BY FINRA.

Decision & Order of Offer of Settlement

Bar (Permanent)

All Capacities

Indefinite

12/18/2012

DEFAULT DECISION RENDERED NOVEMBER 20, 2012 WHEREIN HORVATH IS FOUND TO HAVE MISAPPROPRIATED FUNDS IN VIOLATION OF FINRA RULE 2010, AND FAILED TO PROVIDE TESTIMONY AS REQUESTED BY FINRA IN VIOLATION OF FINRA RULES 2010 AND 8210, THEREFORE HE IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY. IN LIGHT OF THE BAR, NO FURTHER SANCTIONS ARE IMPOSED FOR HORVATH'S FAILURE TO TIMELY DISCLOSE IN VIOLATION OF NASD RULE 2110, IM-1000-1, ARTICLE V, SECTION 2 OF NASD'S BY-LAWS, FINRA RULES 1122, 2010, AND ARTICLE V, SECTION 2 OF FINRA'S BY-LAWS. DECISION IS FINAL DECEMBER 18, 2012.