SEC Bars Advisor for 20-Year, $24M Ponzi Scheme

Smith communicated with the victim investors regarding Northstar in person, over the telephone, and via email and text messages, according to the orders.

“Knowing that his statements were false, Smith told these clients that Northstar was an annuity or something similar to an annuity, or that Northstar invested in real estate or the stock market,” the SEC complaint states.

Smith also falsely told clients that the Northstar investments had a minimum rate of return and would be a safe investment, the SEC said.

“In fact, Smith never made any legitimate investments with the $24 million he received from his clients,” the SEC said. “Instead, he used the funds to repay earlier Northstar investors in an attempt to prevent the discovery of his ongoing Ponzi scheme. As a result of this scheme, over 100 of Smith’s clients lost more than $13 million.”

The SEC said that Horton failed to answer the SEC’s order instituting proceedings, respond to a renewed order to show cause why he should not be found in default, or respond to a motion for default and sanctions.

Credit: Diego M. Radzinschi/ALM