Logan Cox Reprimanded for Investment Adviser Registration

CRISTI RAMÓN OCHOA DEPUTY SECURITIES COMMI SSIONER Mail: P.O. B OX 1316 7 AUSTIN, TEXAS 78711 - 3167 Phone: (512) 30 5 - 83 00 Facsimil e: (51 2) 305 - 8310 Texas S tate Securities Board 208 E. 1 0th Str eet, 5t h Floo r Austin, Texas 78701 - 2407 www.ssb.texas. gov E. WALLY KINNEY CHAIR ROBERT BELT MEMBER MELISSA TYROCH MEMBER EJIKE E. OKPA II MEMBER DAVID B. M ONTGOME RY MEMBER IN THE M ATTER OF T HE INVEST MENT § ADVISER RE PRESEN TATIVE AND § Order No. REG -26- CAF -01 AGENT REGISTRAT ION OF LOG AN COX § TO: Logan Cox (CRD No. 692 7720) 6240 W. 1 35 th Street, Suite 214 Overland Par k, KS 662 23 DISCIPLI NARY ORDER B e it r emember ed that Loga n Cox (“R esponde nt”) ap peared before the Securiti es Commiss ioner of t he State of Texas (“Sec uriti es Commissi oner”) and cons ented to t he entry o f this order (“Or der”), the Fi ndings of Fact and C onclus ions of Law and the Undertaki ng inc orpor ated by refere nce her ein. FINDINGS O F FACT 1. Responden t has waiv ed (a) R espon dent’s rights t o noti ce and heari ng in thi s matter; (b) R espond ent’ s rights to appear and pres ent evidenc e in this matt er; (c) Responden t’s r ight t o appeal this Or der; a nd (d) all oth er pr ocedural ri ghts gra nted to Respo ndent by Th e Securi ties Act, Tex. Gov’t Code §§ 4001. 001 - 4008. 105 (“Tex as Securi ties A ct”), and the A dmini strat ive Pr ocedure A ct, T ex. Gov’ t Code Ann. §§ 20 01.001 - 2 001.90 3. 2. On or about June 30, 2020, Responde nt regi stere d with t he Secur ities Commiss ioner as an a gent of Arete Wealth Manage ment, L LC. 3. On or about June 30, 2020, Responde nt regi stere d with t he Secur ities Commiss ioner as an in vestm ent advi ser re pre sentati ve of Ar ete Wea lth Advi sors, LLC. 4. On May 1, 2025, Res pond ent’s f ormer e mplo yers, Arete We alth Ma nagem ent, LLC and Aret e We alth Adv is ors, L LC (col lectivel y, “ Arete”) file d a For m U 5 1 disclosin g Responden t’s v oluntar y r esignati on fro m Aret e. 1 A Form U 5 is th e Uniform Ter mination N otice for Sec urities Ind ustry Registrat ion, fil ed by a s ecurities firm to report the t erminat ion of a r egistered r epresent ative and/or agent' s empl oyment. This form pr ovides

1. On or abo ut Apr il 25, 2025, R espon dent regi ster ed with the S ecuriti es Commiss ioner as a n agent of Cabin Advisor s, LLC. Becaus e this regi stration w as submitt ed prior to th e U 5 being fi led, t he re gist ration was appr oved a nd is cur rent ly effective. 6. On or about M ay 29, 202 5, Resp ondent also ap plied for re gistra tion wi th the Securiti es Co mmissio ner as an inv est ment advis er repr esent ative of C abin Advisor s, LLC. This r egistr ation is curr ently pendin g. 7. During R espon dent’s time at Ar ete, he was an i nvestm ent a dviser repr esentati ve for about four hun dred thirty - thr ee (433) clie nt acc ounts a nd an a gent for abou t one hundred seventy - n ine (17 9) cl ient ac coun ts. 8. In connect ion wi th his r ole as an age nt, Res pond ent reco mmende d tw o (2) cl ients purchas e a cert ain alt ernativ e inves tment w ithout givi ng appro priat e weig ht to certain co sts ass ociate d with the r ecommen dati on, as re quired by R egula tion Bes t Inte rest (“Reg B I”). Securiti es - Bas ed Lines of Credit 9. A securi ties - b ased lin es of c redit (“SBLOC ”) i s a line of credi t th at is secured by the val ue of a cli ent’ s publicl y trad ed secur ities. To obtai n the line of credit, the client pl edges their sec urities as colla teral to a bank. 10. One bene fit of an S BLOC i s that it pr ovide s li quidity for the cli ent wi thout the immediat e sal e of secur ities i n his or h er inves tment portf olio. Amon g oth er benefits, this coul d help a cl ient av oid tr igger ing a c apital gains t ax. 11. Securiti es - bas ed lin es of cr edits may be used in a v ari ety of w ays, including the purchas e of real estat e, bus iness i nvest men ts, hom e renov ations, tax bil ls, a nd debt cons olidati on. 12. Securiti es - bas ed lines of credi t also car ry ri sks. For example, if the c ollateral, whic h in thes e cases ar e the client ’s secur ities, decli nes in v alue, then t he bank c an is sue a margin c all 2 and requ ire t he client t o eith er post more col later al or r epay part of the loan. I f the decl ine i s severe eno ugh, t he bank c an liquid ate the pl edge d securities. 13. In additi on to the a bove r isks, the client m ust pay interest t o the i ssuing ba nk on the loan. T he inter est r ate is de penden t on a number of fact ors, inc luding b ut not limited to, the siz e of th e loan, the v alue of s ecuri ties offer ed as col lat eral, an d the Secure d Overnig ht Financ ing Rat e (“SOF R”) 3. The rate of interes t has gr eatly varied ov er the past f ive (5) years, goin g as l ow as 1.90% t o as hi gh as 7.97%. regulatory bodi es with det ails about t he depart ure, inc luding the t erminat ion date and the reason for the terminat ion. 2 A margin ca ll on an SBLO C occur s when the value of the investm ent portf olio fal ls belo w the b ank’s required minimum and the bank dem ands th e clien t to add funds or c ollateral to th e accou nt to maintain the required l oan - to - value rat io. 3 The SOF R is a br oad meas ure of the c ost of bor rowin g cash over night c ollater alized by Treasur y Securities.

2. Another c ost tha t may be ass ociate d with a n SBLOC i s the fee c harge d on the assets used to secure the SBLOC. An inv estmen t advi ser repr esen tative ty pical ly charges a conti nual manage ment fe e for the ongoing manage ment of a cl ient’s entire p ortfoli o or AU M 4. When a c lient pledge s their securi ties f or an SBLOC and those sec uriti es remai n in th eir m anaged portfol io, t he clie nt con tinues t o be charge d a mana gement f ee on t hose assets. 15. The princ ipal a nd i nteres t can b e fre ely pai d down w ithout penal ty dur ing t he duratio n of th e loan. R espondent’s V iolation of the Care Obligation of Regulation Best Inte rest 16. Beginni ng in J une 2 020, br oker - dealers and t heir associat ed persons were required to c omply w ith R eg BI, the S ecuriti es and Ex cha nge Co mmissio n’s rul e establis hing a new s tandard of cond uct. 17. Reg BI esta blished a sta ndard of c onduct that r equir es br oker de alers and associat ed per sons, w hen rec ommendi ng a s ecurity to a retai l cust omer, to act i n the bes t int erest of t hat ret ail c ustom er at the ti me t he reco mmenda tion i s made, without pl acing the ir financ ial or o ther in ter ests ah ead of t he int erest of the customer. 18. Reg BI es tabli shes fou r obli gatio ns: (1) D isclos ure Obli gation, (2) Care Obligati on, (3) Conf lict of Inter est O bligatio n, and (4) C omplianc e O bligatio n. 19. The Care Obligati on requires a brok er deal er and i ts ass ociated per sons to have a reaso nable basi s to believe t hat t he recom mendati on is i n the be st int erest of a particul ar ret ail cus tomer based on th at re tail c ustomer ’s inv estment pr ofile an d th e potenti al risk s, rewar ds, an d costs associ ated wi th the rec ommen dation. 20. Responden t reco mmende d at l east tw o (2) c lient s purc hase a c ert ain alt ernative investm ent kn owing that b oth cl ients would financ e the purch ase us ing a n SBLOC at inter est rat es abov e s even (7) perce nt. 21. One clien t, Cli ent A, was for ty - thre e (43), had inv est ment obj ecti ves of ca pital apprecia tion a nd grow th; an d a risk t oleranc e of m oderatel y aggr essi ve. Cli ent A’s income w as $295,0 00, and his /her net wort h and li quid net w orth wer e $2,909, 000 and $1,600,0 00, res pec tively. 22. Client A had aver age in vestm ent knowl edge of stocks and mutual funds and limited investm ent know ledge of alt ernati ve inv estme nts. 23. Client A t ook out a $300, 000 SBLO C. In F ebruar y 202 3, R esponde nt recomme nded Client A use $150,00 0 of t he SBLOC to inves t in a pr ivate 4 Asset s Under M anagemen t (“AUM”) is the total marke t value of the investm ents and c ash an inv estment adviser r epresentat ive ma nages on a client ’s behal f. An investment adviser repres entative is paid by assess ing a fee on t heir c lient’s AUM, typic ally betw een 1% and 2% of the AU M.

placemen t, e2c LLC Cl ass B Uni ts 5 (the “Inv estme nt”). T he Inves tment p ays no interest, is illiquid, and has a hold time of seven (7) years. The inv estment al so carri es numerous othe r risks as w ell as po tenti al benefi ts. 24. At the time of this rec ommen dation, t he in teres t rate o f the SBLOC was 7.17%. 25. From F ebruary 2023 to Jul y 20 25, Cl ient A pai d $2 7,742. 11 in i nter est on the $150,00 0 used to purc hase the Inv estment. 26. Client A was also c harged a 1.15% fe e on the assets pl edg ed to secur e th e SBLOC. 27. Additio nally, C lien t A paid a six (6) per ce nt com mission, t otalin g $9,000, to Responden t. 28. Another c lie nt, Cl ient B, was a limited liabi li ty compa ny (t he “ Company ”). T he Company had a n inves tment obj ective o f capit al apprec iati on with a risk tolerance of moder ately aggres siv e. Client B’s i ncom e was $ 2 5,000, and Cl ient B’s r eport ed net wort h and li quid n et w orth wer e $1, 254,800 and $ 9 03,500, respe ctiv ely. 29. The sol e mem ber of C lient B had average i nvestmen t know ledge of s tocks and mutual f unds an d limited investment knowl ed ge of alt ernativ e inv estmen ts. 30. Client B took out a $ 500,0 00 SBLO C. In M arc h 2023, Client B used $1 25,000 of the SBLOC to inv est in the Inv estm ent. 31. At the time of this rec ommen dation, t he in teres t rate o f the SBLOC was 7.22%. 32. From Mar ch 202 3 to Jul y 2025, C lient B paid $ 18,63 2.98 in i nter est on t he $125,00 0 used to purc hase the Inv estment. 33. Client B was al so ch arged a one (1) per cent fee on the as sets pledged to s ecure the SBLOC. 34. Additio nally, C lien t B paid a six (6) per ce nt com mission, t otalin g $7,500, to Responden t. 35. Additio nally, R espond ent compl eted a Re g BI c hecklis t for each cl ient’ s purchas e of the Inves tment. Respon dent di d not inc lude how the Inv estmen ts wer e being funded or any an alysi s or r ational e for us ing an SBLOC at an i nter est rat e over seven (7) perc ent to pur chase an alt ernative i nvestment. Res ponde nt als o did n ot mention the co mmissio ns or AU M fee. CONCLUSIO NS OF LAW 1. Responden t’s reco mmendati on that tw o (2) clients purc hase an al ternati ve investm ent wi thout consi dering the c osts assoc iated w ith f inanci ng t he pur chas e 5 e2c LLC Cl ass B U nit is an investm ent in e2C ompan ies, whic h is a com pany that pr ovides energy solutions a nd serv ices, sp ecific ally the on going develo pment of equipmen t and e ngineer ing costs for identifie d instal lations bac ked by e nergy ser vice a greements.

through a n SBLOC wit h an int erest r ate ov er sev en (7) p ercen t viola tes Reg ulatio n Best Int erest’ s Care Obl igation and is th erefor e an ine quita ble pr actic e in the sale of secur ities. 2. Pursua nt to Sectio n 4007. 105(a) (3)(A) of th e Tex as Secur iti es Act, the aforeme ntioned i nequi table practic e const itutes a basis for the i ss uance of an order r epriman ding Re spondent. 3. Pursua nt to Secti on 400 7.108 of t he Tex as Securit ies Act, the Sec uritie s Commiss ioner may o rder a d ealer, agent, invest ment a dviser, or i nvestmen t adviser repres entati ve to pay a refu nd to a client or a purc haser of secur ities or servi ces from the per son o r c ompany as provided in an agre ed ord er or an enforce ment ord er inst ead of or in addi tion t o imposi ng an ad minist rative pe nalty or other sanct ions. ORDER 1. It is th erefor e ORDER ED that Logan C ox’s r egis tratio n as an inves tment adviser represen tative w ith t he Sec uriti es Com missio ner is hereby G RANTE D. 2. It is fur ther OR DERED that Loga n Cox is h er eby REPRIM ANDED. 3. It is fur ther OR DERED that Logan Cox sh all REF UND c ertain cl ients pursuant to the terms of an und ertak ing incor porated by referenc e herein. SIGNED AND ENTERED BY T HE DEPUTY SECURITIES CO MMISSIONER this 8th day o f J anuary, 2 02 6. _________ _____ ____ _______ Cristi R. Ochoa Deputy Secur ities C ommissi oner