Horowitz, who was the subject of a Commission Order dated July 31, 2014, originated the strategy to use variable annuities as short-term investment vehicles. The strategy involved the purchase by investors of annuitant-driven variable annuities with a terminally ill individual, generally a person in hospice care or in an assisted living facility, designated as the annuitant (i.e., a terminally ill individual was identified to serve as the measuring life). Variable annuities with favorable bonus features were selected, such that a significant percentage of money was immediately credited to the owner’s account. When the terminally ill annuitant died, the owner of the annuity collected both his original investment and the bonus amount. The faster the annuitant died, the sooner the owner was able to collect his principal, any gains from the sub-account investments, and the bonus. The selection of terminally ill annuitants meant that the owners of the annuities stood to get back their money quickly, making a fast and sizeable return on their original investment without the risk of getting back less than their full investment due to the principal protection feature of variable annuities. Under the strategy, the annuity owner and the annuitant had no relationship or connection outside of the variable annuity contract; they were strangers. The annuitants and their families did not receive any portion of the proceeds of the annuity, all of which flowed back to the annuity owner upon the annuitant’s death. In most cases, it appears the annuitants’ families were unaware that an annuity was taken out on the life of the terminally ill patient. During the fall of 2007, Horowitz, a registered represent ative at Morgan Stanley, pitched this investment strategy to his clients, chose the variable annuities to be purchased, and submitted the annuity purchases to Morgan Stanley or other broker-dealer firms. Hoping to increase the size of his variable annuity business, Horowitz began looking for institutional capital to fund more purchases of variable annuities with terminally ill annuitants.