SECURITIES EXCHANGE ACT OF 1934
RELEASE NO. 43498 / October 31, 2000

ACCOUNTING AND AUDITING ENFORCEMENT
RELEASE NO. 1339 / October 31, 2000

ADMINISTRATIVE PROCEEDING NO. 3-10355

IN THE MATTER OF HORTON & COMPANY AND EDWARD C. HORTON

Proceedings pursuant to Rule 102(e) of the Commission's Rules of Practice have been instituted against Horton & Company and Edward C. Horton ("Horton").

The Order Instituting Proceedings alleges that Horton & Company and Horton have each willfully aided and abetted violations of Section 13(a) of the Securities Exchange Act of 1934 and Rules 13a-1 and 13a-13 thereunder, and have engaged in improper professional conduct.

It is alleged that Horton & Company, and its managing partner Edward C. Horton, while the audit firm was engaged as the auditor for Monarch Investment Properties, Inc., failed to properly record, or require Monarch to record, an expense related to certain options Monarch issued to consultants in 1997. It is alleged that these options were issued at a price far below the stock's fair value at the time. The failure of Horton and his audit firm to record the appropriate expense item in connection with the options transaction allegedly caused the financial statements of Monarch, as contained in its filings with the Commission during 1997 and 1998, to materially misrepresent the company's financial condition and results of operations.

It is also alleged that Horton & Company and Horton lacked independence with respect to Monarch. During the time Monarch was a client of Horton & Company, the audit firm's staff accountant allegedly made all the bookkeeping entries for Monarch, using raw data such as check stubs and bank statements. Horton & Company thereafter audited the resulting financial statements.

A hearing before an administrative law judge will be scheduled to determine whether the allegations against Horton & Company and Edward C. Horton are true and to determine, what sanctions, if any, are appropriate in the public interest with respect to those respondents.